News: UK bank HSBC has posted its Q313 financial results, according to BBC News. The company's pre-tax profits came to US$4.5bn, up from US$3.4bn in the equivalent quarter of 2012. The company cut its operating expenditure by US$700mn y-o-y, falling to US$9.6bn. More than half of the bank's pre-tax profits came from its operations in the UK and Hong Kong markets.
BMI View: We had previously expected banking sector assets to stabilise towards the end of 2013 as the economy gathered momentum. However, based on data from the first eight months of the year, it is clear that full-year assets will contract in 2013. As such, we have revised down our estimate for this year, with assets now expected to fall by 1.4% from positive growth of 2.2% previously. Heading into 2014, we believe that the recovery in economic activity and improvement in private sector confidence will go some way to bolster UK banks, but have nonetheless revised down our growth forecast to -0.5% from 3.0% to reflect continued deleveraging.