Profits at HSBC have plunged after Britain’s biggest bank suffered a string of hits during the third quarter, including a loss on the sale of its Brazilian business and a fresh provision to cover the payment protection insurance mis-selling scandal.

Pre-tax profits at the lender tumbled to $843m from $6.1bn a year earlier, a drop of 86pc and well below the $2.4bn that analysts had expected. On the bottom line, HSBC swung to a $204m net loss from a $5.2bn profit in 2015, pushed into the red by a series of one-off charges in the three months to the end of September.

The sale of HSBC’s Brazilian business to Banco Bradesco for $5.2bn saw the lender book a $1.7bn loss, while it also took $1bn charge to cover restructuring costs, a $439m provision to compensate customers for PPI, and a hit from the pound’s slump against the US dollar.

Chief executive Stuart Gulliver has been slashing costs to bolster profits and last year announced 25,000 job cuts. The disposal of the loss-making Brazilian operations was also part of Mr Gulliver’s cost-cutting programme.

Shareholders had been braced for the hit from the deal, however, and instead cheered the bank’s healthier than expected capital position, which gave them reassurance about the bank’s dividends and prompted investors to send its shares up as much as 5pc.