Earnings

HSBC Third-Quarter Pretax Profit Jumps 32% To $9.6 Billion As Legal Charges Drop Out, Adds $1 Billion Buyback

The bank also held its 2026 banking net interest income floor of at least $46 billion.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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HSBC Third-Quarter Pretax Profit Jumps 32% To $9.6 Billion As Legal Charges Drop Out, Adds $1 Billion Buyback

HSBC Holdings, the London-headquartered bank, said third-quarter profit before tax rose 32% to $9.6 billion from a year earlier, and it intends to start a new share buyback of up to $1 billion. The release, furnished to the SEC on Tuesday, credits much of the jump to the absence of $1.4 billion of legal provisions booked in the third quarter of 2025.

A one-off drives the jump

Profit before tax climbed $2.3 billion. Notable items, which the bank defines as outside the normal course of business, added a net $1.4 billion to the comparison, reflecting the missing legal provisions. Profit after tax rose 38% to $7.6 billion.

Strip out those items and use constant currency, and profit before tax rose $0.9 billion to $10.0 billion. Annualised return on average tangible equity was 17.7%, against 12.3% a year earlier, or 18.2% excluding notable items.

Revenue rose $0.8 billion to $18.6 billion, mostly from banking net interest income, which rose $0.6 billion to $11.7 billion. Net interest income of $9.3 billion was up 6%, helped by deposit growth and reinvesting its structural hedge at higher yields. Credit losses fell 17% to $0.8 billion, and operating expenses fell 12% to $8.8 billion.

Capital dips, buyback follows

The common equity tier 1 capital ratio was 13.9%, down 0.2 percentage points from 30 June 2026 and below the bank's medium-term operating range of 14% to 14.5%. The company cited higher risk-weighted assets, lower fair value of some debt holdings and the earlier buyback.

HSBC finished the $1 billion buyback announced at its interim results on 28 September 2026. It expects the new one of up to $1 billion to be complete by its 2026 full-year results announcement. The board also approved a third interim dividend of $0.10 per share.

HSBC shares fell 5.66% to $86.05 in Tuesday trading, from a prior close of $91.21, giving the bank a market value of $311.9 billion.

Guidance and a business being pruned

HSBC kept its outlook: banking net interest income of at least $46 billion in 2026, and return on tangible equity of 17% or better for 2026 through 2028, excluding notable items. Group CEO Georges Elhedery said clients are turning to the bank to "navigate uncertainty and seize new opportunities."

The bank says it has identified about $1.9 billion of annualised cost savings since the start of 2025, against an intention to action around $2 billion by the end of 2026. In the quarter it completed the sale of its Uruguay operations, and it announced the sale of its Australian home and personal loan portfolio and the wind-down of the rest of its retail business there.

The Australian loan sale is expected to complete in the first half of 2027, subject to regulatory approval.

Sources

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