What's going on?

HSBC announced strong quarterly results on Monday, but the British bank thinks its best chance of truly finding itself might still lie in China.

What does this mean?

HSBC, like plenty of other banks, set aside a massive pot of cash to safeguard itself in case borrowers couldn�t pay back their loans last year. But like plenty of other banks, it was feeling confident enough last quarter to inject a substantial portion back into its business: $700 million worth, to be precise. That pushed its profit up 74% compared to the same time last year � way beyond the 23% analysts were expecting.

There might be more where that came from: global central banks are looking more and more likely to start raising interest rates, which should boost the income HSBC makes on the loans it offers. That�s given the firm a skip in its step: it announced on Monday that it�d be buying back $2 billion worth of its own shares, and said there might be more to come (tweet this).

Why should I care?

Zooming in: HSBC isn�t giving up on China.
HSBC has been cutting back on its underperforming US and European businesses since the start of the year, and instead putting the money toward its most profitable region: Asia. The bank even admitted on Monday that China is still a big draw, arguing that issues in the country�s property market � we�re looking at you, Evergrande � won�t actually have any long-lasting effects on the world�s second-biggest economy.

Zooming out: But Goldman might be�
Goldman Sachs, meanwhile, said on Monday it�s expecting China�s economic growth to take a hit next year if the government keeps cracking down on once-booming sectors like real estate and tech. And it put its mouth where its money is: the investment bank downgraded its 2022 forecast for China�s economic growth from 5.6% to 5.2%.