HSBC mulls overhauling its business model to charge fees for current accounts and other services as profits slump due to rock-bottom rates
HSBC saw pre-tax profit fall 36% to $3.1bn (£2.4bn) and revenues fall 11% in Q3
But it set aside less money for bad loans $785m compared to $3.8bn in Q2
The bank said that it may pay a 'conservative' 2020 dividend despite profit fall
HSBC shares closed up 3.4% to 330p in London on Tuesday
Banking giant HSBC said it could start charging for basic banking services such as current accounts as it unveiled a 36 per cent fall in third quarter profits.
But shares in the Asia-focused lender jumped after it said that it may pay a 'conservative' 2020 dividend as it set aside less money than expected for bad loans.
HSBC shares in London closed up 3.4 per cent to 330p on Tuesday. But they remain down around 42 per cent since the start of the year.
The bank made pre-tax profit of $3.1billion (£2.4billion) between July and September, down 36 per cent from $4.8billion (£3.7billion) in the same quarter last year, but above analysts' expectations.
Revenues fell 11 per cent to $11.9billion (£9.15billion) as lower interest rates hit income, with revenues from lending falling by a larger near-15 per cent.
HSBC, like other banks, is seeing income shrink due to low interest rates, which are restricting how much it can charge for loans.
The margin squeeze is set to continue, HSBC said, as rates may even turn negative in the near future, challenging 'the long-term profitability of the banking sector'. So the bank is now looking to flip its main source of income from interest rate to fee-based businesses.
https://www.dailymail.co.uk/money/markets/article-8883391/HSBC-considers-paying-conservative-2020-dividend.html