HSBC Reports Q3 Profit Rise, Says Full-Year Guidance Remains Unchanged

HSBC Raises Third-Quarter Profit

HSBC Holdings plc reported a 32% year-over-year increase in third-quarter profit before tax to $9.6 billion. Profit after tax rose 38% to $7.6 billion, while the bank said constant-currency profit before tax excluding notable items increased by $0.9 billion to $10.0 billion.

The reported improvement was driven partly by a $1.4 billion favorable impact from notable items, reflecting the nonrecurrence of legal provisions in the year-earlier period, alongside higher revenue and lower credit impairment charges. Annualized return on average tangible equity was 17.7%, compared with 12.3% in the third quarter of 2025; excluding notable items, it was 18.2%.

Revenue Rises With Stronger Banking Income

Revenue increased by $0.8 billion to $18.6 billion from the comparable period in 2025, primarily reflecting growth in banking net interest income. Net interest income rose 6% to $9.3 billion, while banking net interest income increased by $0.6 billion to $11.7 billion.

HSBC attributed the increase in banking net interest income to deposit growth and reinvestment of its structural hedge at higher yields. Net interest margin was 1.57%, stable from the year-earlier period.

Fee and other income also increased in Corporate and Institutional Banking’s Wholesale Transaction Banking and Debt and Equity Markets units, as well as in Investment Distribution and Private Bank in Wealth. The bank said higher customer activity supported those increases, partly offset by valuation losses in Corporate Center and the nonrecurrence of a one-off favorable impact in Insurance during the prior-year period.

Costs and Credit Charges Move Lower

Operating expenses declined by $1.3 billion, or 12%, to $8.8 billion. The decrease included a favorable $1.4 billion net impact from notable items, reflecting the nonrecurrence of legal provisions in the year-earlier period.

Expected credit loss and other credit impairment charges fell by $0.2 billion, or 17%, to $0.8 billion. HSBC attributed the decline to a $0.1 billion reduction in stage-three charges related to Hong Kong commercial real estate, as well as lower charges in its UK business and International Wealth and Premier Banking business in Mexico.

Management Retains Full-Year Targets

On the earnings call, Group CFO and Executive Director Manveen Kaur said HSBC remained confident of meeting its full-year targets and was on track to meet all guidance, which remained unchanged. Management also said revenue and profit before tax, excluding notable items, rose 5% and 10%, respectively.

The call commentary highlighted broad operating performance across HSBC’s principal businesses. The bank said deposits increased by $105 billion over the prior 12 months, including a $21 billion increase in Hong Kong during the quarter. Lending growth was supported by mortgages, UK commercial lending, and corporate and institutional banking in Asia.

Capital Returns Announced

HSBC declared a third interim dividend of $0.10 per share and said it intended to initiate a further share buyback of up to $1 billion. The company did not characterize the buyback as completed; the stated intention was to initiate it.

Some market coverage focused on a reported headline earnings-per-share shortfall and a premarket decline in HSBC’s shares, while management emphasized underlying revenue growth, profit before tax excluding notable items, and unchanged full-year guidance.