HSBC shares jumped Monday after better-than-expected earnings. Reuters banking correspondent Lawrence White says it owes the U.S. Federal Reserve for much of its gains.
"Positive jaws".
Not just on HSBC's lion statue.
It's the jargon key to the bank's soaring share price Monday (October 29).
City parlance for when revenues are rising faster than costs.
A good thing, and what the bank now expects for 2018.
HSBC profit up by more than a quarter to almost six billion dollars for the latest quarter.
Its shares up around five percent on the news.
The bank may also owe a big 'thank you' to this man: U.S. Federal Reserve Chairman Jerome Powell.
Reuters banking correspondent Lawrence White explains:
SOUNDBITE, REUTERS BANKING CORRESPONDENT LAWRENCE WHITE, SAYING:
So the good news for HSBC investors is that they seem to be managing that they seem to be balancing going back to growth mode, while keeping a grip on costs. But what's really driving profits is outside the bank's control. It's US interest rates. So every time the Fed hikes the rate by 25 basis points, that's 800 million dollars in revenue for HSBC. So all they've got to do is try to keep hold of their costs and wait for rates to go up. They should benefit.
Seemingly cloudless skies over the bank.
HSBC says Brexit is having no impact to speak of.
It's also calm about prospects for a U.S.-China trade war.
Surprising, perhaps:
SOUNDBITE, REUTERS BANKING CORRESPONDENT LAWRENCE WHITE, SAYING:
So it's important to remember that while HSBC is based here in London, it makes three quarters of its profits in Asia, particularly Hong Kong,
Chief executive John Flint says a trade war could be a worry,
But there's no real impact yet.
He's still planning to pour billions into this place.
China's Pearl River Delta, home to 11 booming industrial cities.
Investors seem to think the sun is shining on his strategy.
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