.theguardian - 13 hours ago

Government’s official forecaster to cut productivity growth prediction more than expected, which could result in bigger budget holeHere’s more on HSBC.HSBC has reported a 14% drop in third quarter profits to $7.3bn (£5.5bn), as it took a dual hit from both a real estate downturn in Hong Kong, and a lawsuit over the Bernard Madoff ponzi scheme.

It came as the London-based bank reported a 24% jump in operating costs to $10.1bn, which included restructuring costs - severance for bankers let go as part of the process - linked to a major shake-up under chief executive Georges Elhedery announced last year.

But those operating costs also reflected a $1.1bn provision to cover a lawsuit by investors who lost money in the Madoff ponzi scheme. It comes after a Luxembourg court turned down HSBC’s appeal.

Madoff admitted in 2009 to defrauding thousands of investors, losing them $65bn (£48.8bn). He died in prison in 2021. HSBC has been battling a 2009 lawsuit against its Luxembourg arm, with investors trying to recoup losses from the fraud. HSBC said it plans to file a further appeal with the Luxembourg Court of Appeal and, if that fails, it will dispute the final amount in later proceedings.

HSBC also put aside another $1bn to deal with the ripple effects of China and Hong Kong’s real estate downturn, which has hit the banking sector, with a rise in bad debts linked to the crash in property prices.

Chief executive Georges Elhedery said:We are becoming a simple, more agile, focused bank, built on our core strengths. The intent with which we are executing our strategy is reflected in our performance this quarter, despite taking legal provisions related to historical matters.We remain fully focused on helping our customers navigate new economic realities, putting their changing needs at the heart of everything we do.Our independent forecaster is likely to downgrade the forecast for productivity in the UK, based not on anything this government has done but on our past productivity numbers, which, to be honest, since the financial crisis and Brexit, have been very poor.9am GMT: Italy business and consumer confidence for October Continue reading...

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