HSBC reports 35% fall in profits

HSBC has warned it could start charging for "basic banking services" after reporting a 35% fall in pre-tax profits for the three months to the end of September.

With interest rates so low, Europe's biggest bank by assets is finding it difficult to charge more for loans than it pays out to depositors, reports Sky News.

The bank said it is considering charging for products such as current accounts, which British customers are accustomed to having for free.

Chief Financial Officer Ewen Stevenson told Reuters: "We will have to look at charging for basic banking services in some markets, because a large number of our customers in this environment will be losing us money."

HSBC reported pre-tax profits of $3.1bn (£2.4bn) for the third quarter, down from $4.8bn (£3.7bn) at the same time last year.

The drop was less than expected, with the bank saying it expects losses from bad loans will not be as bad as forecast and that its main markets will improve.

Asia-focused HSBC said: "This latest guidance, which continues to be subject to a high degree of uncertainty due to COVID-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low."

The bank has previously said it will cut costs and downsize, shedding 35,000 jobs worldwide, selling its French business and minimising its presence in the US.

It also plans to reduce costs to $31bn (£24bn) by 2022, well below last year's operating expenses of $42.3bn (£32bn).