HSBC, Europe’s largest bank, on Tuesday reported third-quarter pretax profit largely in line with analyst estimates respected by the bank, and announced a share buyback of up to $1 billion by the end of this year.
HSBC’s revenue rose to $18.6 billion from $17.8 billion in the same period last year, while net banking interest income rose 6% as the bank records higher fee income from its corporate and institutional banking and wealth management businesses.
Here are HSBC’s third-quarter results compared to the bank’s consensus estimates.
- Profit before taxes: $9.63 billion versus $9.69 billion expected
- Revenue: $18.6 billion versus $18.93 billion expected
The bank’s third-quarter pre-tax profit rose 32% from a year earlier to $9.6 billion, also reflecting the absence of $1.4 billion in legal provisions recorded during the same period last year. Higher revenue and lower credit losses also supported earnings.
Shares of HSBC, which approved a third interim dividend of 10 cents per share, rose 0.63% in Hong Kong.
The bank’s net interest income reached $9.3 billion in the third quarter, supported by deposit growth and higher returns on reinvestments in the bank’s structural portfolio.
At the same time, operating expenses fell 12% year-on-year to $8.8 billion, largely due to the non-recurrence of legal provisions recorded a year earlier. Excluding notable items, spending increased amid higher inflation and technology spending.
Looking ahead, HSBC maintained its forecast of bank net interest income of at least $46 billion in 2026, while reiterating its target for return on average tangible equity – a measure of profitability assessment – of 17% or more for 2026 through 2028, excluding notable items.
The bank also expects its revenue to increase every year until 2028, targeting 5% growth that year compared to 2027, excluding notable items and at constant exchange rates.
HSBC said it remained on track to achieve operating expense growth of around 1% in 2026 based on its target, although strong business performance could lead to additional performance-related pay and slightly higher cost growth.
HSBC is reportedly considering major job cuts at its UK wealth management business, as part of a wider drive to embrace artificial intelligence.
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