* HSBC Q3 results due Monday 0815 GMT
* Underlying profit seen at about $5.4 bln, up yr/yr
* Charge for U.S. money-laundering probe to rise to $1.5
* Cost cutting, profitability targets under scrutiny
* HSBC chairman, Barclays, Santander UK CEOs at banking
inquiry 1600 GMT
By Steve Slater
LONDON, Nov 5 HSBC Holdings is expected
to report a jump in quarterly profits on Monday as lower losses
from bad debts and a cost-cutting plan outweigh mis-selling
charges and the impact of tough economic conditions across the
Europe's biggest bank will be the last of Britain's major
lenders to report and all are facing intense scrutiny on how far
they are streamlining operations, the impact of tougher
regulations, and their standards as they get hit with fines and
compensation charges for past misconduct.
HSBC Chief Executive Stuart Gulliver kicked off
the bank's restructuring in early 2011, before most rivals, and
the benefit is starting to feed through to the bottom line.
The bank should report an underlying profit - after
stripping out the impact of disposals and changes in the value
of its own debt - in the July-September quarter of between $4.9
billion and $6.6 billion, according to a range of analysts'
forecasts, up from $3 billion a year earlier.
Profits will come in at $5.4 billion, according to Credit
HSBC, whose origins date back to 1865 as a financier of
trade between Europe and Asia, operates in 84 countries and
Gulliver is well into his plan for $3.5 billion in cuts, axe
unprofitable areas and direct investment to Asia.
He has cut 27,000 jobs and sold or closed 26 businesses,
including selling its U.S. credit card arm and half of its U.S.
HSBC's bad debts in the third quarter are predicted to drop
to $2.2-2.5 billion from $3.9 billion a year ago. Operating
costs should also drop by more than $1 billion.
But Gulliver faces scrutiny on whether he can get costs to
below 52 percent of revenue from around 57.5 percent in the last
He also aims to lift return on equity, a key measure of
profitability, to 12-15 percent in 2013. I n H1 2012, it was 10.5
Other problems also continue to cast a shadow, including the
size of a fine it faces for lax anti-money laundering controls
in the United States.
On Sunday, Sky News reported that HSBC was about to raise
its provision for fines from U.S. authorities by $800 million to
$1.5 billion. HSBC declined to comment.
Analysts have said the bank may also have to set aside about
150 million pounds more to cover mis-selling of UK payment
HSBC is also one of more than a dozen banks under scrutiny
in the Libor global interest rate-rigging scandal that has put
the industry's culture and standards under fire.
Chairman Douglas Flint on Monday will appear before UK
lawmakers investigating standards. He will appear alongside new
Barclays CEO Antony Jenkins and Santander UK
boss Ana Botin at 1600 GMT.
HSBC benefits from its strong position in faster growing
Asian markets, and analysts estimate its investment bank should
deliver profits of more than $2 billion as revenues rise to
$4.4-4.7 billion, mi r roring the strong fixed income performance
shown by rivals.