HSBC has recorded a $1.7bn loss from the sale of its Brazilian unit, with the bank’s pre-tax profits tumbling by 86pc in the third quarter.

The banking giant’s $843m quarterly profit fell below analysts’ expectations of $2.45bn, leaving Europe’s largest bank down $6.1bn from the same period a year ago.

Revenues also fell to $9.5bn – down by $5.6bn compared with last year’s earnings. However, adjusted pre-tax profits – excluding one-off losses – beat expectations, rising 7pc to $5.59bn.

HSBC’s shares jumped 4.5pc to £6.21 in morning trade as investors cheered the bank’s update.

Stuart Gulliver, group chief executive, said quarterly performance underscored the strength of the bank’s global network.

“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,” he said.

“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.”

The bank has continued to rein in poorly performing assets in the three months to September, selling $900m from its consumer and mortgage lending US division.

The bank – which maintains a large proportion of its business in Asia – is yet to comment on who will replace chairman Douglas Flint after announcing in March that he would step down next year.

However, HSBC confirmed last week that it would be hiring from the London Stock Exchange.

The new chairman’s main priority will be finding a replacement for Mr Gulliver, who is also expected to step down by 2018.