HSBC (00005.HK), one of three lenders authorised to issue currency in Hong Kong, said it would accelerate efforts to cut costs and remodel its business after profit slumped more than analysts estimated last quarter because of weaker results in retail banking and global markets operations.

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Net profit at HSBC, which makes most of its revenue in Asia, fell by 24 per cent to US$2.97 billion in the three months ended September 30 from a year earlier, it said on Monday, marking the worst quarterly drop since the last quarter of 2016. On a pre-tax basis, the biggest lender in Europe by assets recorded a profit of US$4.84 billion, below a consensus estimate of US$5.29 billion by analysts compiled by the bank.

HSBC is also grappling with sluggish performance in continental Europe and the United States, which interim chief executive Noel Quinn called “not acceptable” and vowed to restructure.

Hong Kong protests

The near- to medium-term outlook for HSBC and rival Standard Chartered (02888.HK) has also been clouded by anti-government protests in Hong Kong, their single-biggest profit center. No doubt, Hong Kong has fallen into recession, hit by more than five months of protests that show no sign of relenting, and is unlikely to achieve annual economic growth this year, Financial Secretary Paul Chan Mo-po said on Sunday.

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Bankruptcy petitions presented by debtors in Hong Kong rose nearly a fifth in the September quarter to 1,945 versus the same period a year earlier, government data showed. HSBC said its expected credit losses – including a “charge to reflect the economic outlook in Hong Kong” – increased by US$400 million in the third quarter. Revenue for the first nine months of the year in Hong Kong, however, rose 7 percent

“Obviously the economy is getting impacted by two things – the US-China trade dispute and the protests,”

Chief financial officer Ewen Stevenson, referring to HSBC’s business in Hong Kong.

HSBC is first of the major banks in Hong Kong to report their quarterly results, giving a glimpse to markets on the impact of street protests that has helped drive the local economy into a technical recession. Standard Chartered (02888.HK) is expected to report its earnings on Wednesday.

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