Business

HSBC boss urges government clarity on EU workers in the UK

HSBC office in Canary Wharf Image copyright AP

HSBC chief executive Stuart Gulliver has urged the government to clarify the status of EU workers in the UK.

Mr Gulliver was asked if the bank planned to move staff from its UK offices following the Brexit vote.

He said the government should be given time to negotiate the process of the UK leaving the European Union.

But he added: "The thing I would say that is slightly more urgent is clarity around the status of EU nationals with jobs working in the UK."

Of HSBC's 42,000 staff in the UK, about 2,000 are from the EU.

The bank warned in February, when it decided to keep its headquarters in London, that it could transfer some of its workforce to its Paris office if the UK left the EU.

Profits dive

Mr Gulliver's comments came as HSBC reported a sharp fall in third-quarter profits, driven by the sale of its Brazilian business.

Pre-tax profit at Europe's largest bank dropped to $843m (£678m) in the three months to the end of September, down from $6.1bn in the same period a year ago.

HSBC took a $1.7bn loss on the sale of its Brazilian unit, and it also pointed to customer compensation in America and currency moves for the fall in profits.

But adjusted profit, which excluded one-off costs, rose 7% to $5.6bn, higher than analysts had expected.

HSBC is the last of the UK's major banks to report quarterly results, after Lloyds, RBS and Barclays posted better-than-expected profits for the period.

Image copyright Reuters
Image caption Investors are waiting to see who will replace chairman Douglas Flint (left) and chief executive Stuart Gulliver

Mr Gulliver said: "Reported profits were down, but adjusted profits were higher than last year's third quarter in all four global businesses and four out of five regions."

David Cumming, head of UK equities at Standard Life, said HSBC's results were "slightly above consensus", with costs a bit better than expected and its investment banking reasonably strong.

HSBC shares rose 4% in Hong Kong and London.


Image copyright Reuters

Analysis: Dominic O'Connell, Today business presenter

The headline numbers in bank financial results can often be misleading, and that is the case with HSBC.

A big fall in reported profits - from about $6bn in the third quarter last year to $800m this - masks what was a reasonable performance from Europe's biggest bank.

The headline numbers were held back by a string of one-offs - the fall in value of the bank's own debt, the $1.7bn loss on the sale of the Brazil operations, and some customer compensation payments in America.

Look past the non-recurring items and profits were slightly better than the same period last year.

The bigger issue for most HSBC shareholders is leadership. Douglas Flint, the long-serving chairman, leaves next year, with Stuart Gulliver, chief executive, going in 2019. Investors want reassurance that succession planning is in hand, and that the bank will break with tradition and appoint an outsider to replace Flint.

Henri de Castries, the French fund manager who already sits on the board, is favourite to take over, but were he to bow out then the bank would face a tricky search for a new leader.

There aren't many experienced financial services executives who have both the track record to sit at the top of HSBC, and the stamina to win over the myriad of regulators who will need to approve the appointment.


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