HSBC’s pre-tax profits collapsed by 86 per cent in the third quarter after a big loss from the sale of its Brazilian business.

The banking giant reported pre-tax profits of £678m in the three months to the end of September, down from £4.9bn in the same period last year.

However, adjusted pre-tax profits, which exclude one-off items, rose 7 per cent to £4.5bn from £4.215bn.

The company’s shares gained as much as 3 per cent before falling back slightly, the biggest intraday jump since 1 September.

The stock had already climbed 11 per cent, this year. The prospect of Brexit has not hit HSBC as hard as many other banks as it collects a large chunk of its revenues in Asia.

Group chief executive Stuart Gulliver said the performance highlighted the strength of the bank’s global reach.

“Reported profits were down, but adjusted profits were higher than last year’s third quarter in all four global businesses and four out of five regions.

“Reported profits included the impact of the disposal of our operations in Brazil, changes in the fair value of our own debt, and the costs of implementing our cost-reduction programmes.”

HSBC set aside £350m to compensate customers for mis-sold PPI, raising the total cost of the long-running scandal to about £4.2bn. It also took a one-time £1.4bn loss on the sale of the Brazilian business.

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The bank stayed quiet about who will replace group chairman Douglas Flint who will leave in March 2017. At the top of the new chairman’s to do list will be the search for a chief executive to replace Gulliver who is also set to depart.

HSBC confirmed last week that it was hiring former London Stock Exchange boss Dame Clara Furse as the chairman of HSBC UK, its domestic retail bank based in Birmingham.

“HSBC’s results show you can’t make an omelette without breaking eggs, and the bank’s efforts to refocus on its Asian roots have weighed down reported profits this quarter, thanks to a large loss resulting from disposal of its Brazilian operations,” said Laith Khalaf, a senior analyst at Hargreaves Lansdown.

However the underlying business numbers from HSBC were pretty positive, with costs and revenues both heading in the right direction, and the bank’s capital position improving significantly, though this was largely down to a change in regulatory requirements.