HSBC Third-Quarter Profit Jumps 32 Percent to $9.6 Billion, Bank Launches $1 Billion Buyback

HSBC said on Tuesday that pretax profit rose 32 percent to $9.63 billion in the third quarter, up from $7.30 billion a year earlier, as Europe's largest bank benefited from higher interest income and avoided the heavy credit losses and legal charges that weighed on the same period last year. The result covers the three months ended September 30 and was in line with estimates compiled by the bank, Reuters reported.

Income rises as costs fall

Net operating income rose 6 percent to $17.79 billion, from $16.78 billion a year earlier. Net interest income grew 6 percent to $9.31 billion, from $8.78 billion, while net fee income rose 1.7 percent to $3.57 billion, from $3.51 billion. Earnings per share rose 46 percent to $0.41, from $0.28. Total operating expenses excluding amortisation and impairment of intangible assets fell 13 percent to $7.95 billion, from $9.12 billion.

Expected credit losses fell 17 percent to $800 million, helped by lower charges linked to Hong Kong real estate and to the bank's wealth businesses in Britain and Mexico, Reuters reported. The bank also benefited from the absence of legal provisions booked in the same quarter a year earlier. Its common equity tier one ratio stood at 13.9 percent on September 30, down from 14.5 percent a year earlier and from 14.1 percent at the end of June. HSBC said capital reforms known as Basel 3.1 would lift that ratio by up to half a percentage point, a larger benefit than the modest effect it had described before.

Wealth revenue stalls and shares fall

The weak spot in the results was wealth. Revenue at the wealth division was flat at $2.7 billion, Reuters reported, after year on year growth of 15 percent in the first quarter and 23 percent in the second quarter. The slowdown showed the challenge of sustaining the bank's recent run of strong results. HSBC shares listed in Hong Kong fell 5 percent after the announcement. The shares remain up 11 percent so far this year.

HSBC announced a share buyback of up to $1 billion, the same size as the previous quarter, and kept its interim dividend at $0.10 per share. The bank said it aims to complete the buyback before the end of 2026. Chief Executive Georges Elhedery said clients continue to turn to the bank in a more complex world, and that simplifying the bank is creating more capacity to invest and grow. HSBC said it remains confident of achieving the targets it set out in February 2026, and Reuters reported the bank is on track to meet its core profitability targets through 2028.

The results arrive one day before the British budget, where Finance Minister John Healey presents his first budget on Wednesday. Activist groups in Britain have stepped up calls for higher taxes on banks after a run of strong profits across the sector, Reuters reported. Bank bosses have lobbied against a higher levy on the sector, arguing that it would curb lending and make Britain less competitive.