(Bloomberg) -- HSBC Holdings Plc signaled stronger trading activity after China unveiled stimulus measures to spur its economy, boosting client transactions.
These measures announced last month resulted in “elevated volatility” at the end of the third quarter, which resulted in increased client activity for wealth, equities and foreign exchange in Hong Kong, the lender said on Tuesday.
HSBC, which counts Hong Kong as its largest market, reported third-quarter profit that beat estimates in its first set of results under new Chief Executive Officer Georges Elhedery. The pickup in business underscores signs of recovery underway in the world’s second-largest economy following a stimulus boost.
Europe’s largest lender also said it is monitoring the carrying value of its stake in Bank of Communications Co., following the stimulus and plan to recapitalize China’s largest commercial banks.
“These developments may have the potential to have a significant impact on the group’s reported earnings, but would be expected to have an immaterial impact on HSBC’s capital, capital ratios and its distribution capability,” the lender said.
HSBC made an impairment of $3 billion against the carrying value of its investment in Bank of Communications on Dec. 31, 2023. As of Sept. 30, the carrying value of the investment was $22.7 billion.
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