HSBC reported third-quarter pre-tax profit of $9.6bn, an increase of $2.3bn or 32% from the same period of 2025, as higher banking income and lower impairment charges supported performance. The comparison was also affected by $1.4bn of favourable movement in notable items, primarily because legal provisions taken a year earlier did not recur. That accounting effect is material to understanding the headline growth rate.
On a constant-currency basis excluding notable items, pre-tax profit increased by $0.9bn to $10bn. Profit after tax on the reported basis rose 38% to $7.6bn. The distinction between statutory and adjusted performance is important because investors use both to judge whether a change reflects underlying customer activity or a one-off movement in charges and provisions. Neither measure should be presented without identifying its basis.
HSBC also reported increased lending and deposit balances during the quarter. Customer lending rose $7.8bn on a reported basis compared with the end of June, or $6.7bn at constant currency. The bank attributed the movement partly to participation in an Indian deposit scheme and growth in UK and Hong Kong activities. A separate reclassification linked to its planned exit from Australian retail banking offset part of that increase.
Customer accounts increased $9.1bn on a reported basis quarter on quarter, or $6.5bn at constant currency. Deposit movements across HSBC’s regions and business divisions were uneven, reflecting both growth and changes in the activities it intends to retain. Balance-sheet growth is not identical to stronger profitability, because the margin earned on loans and deposits depends on pricing, funding costs, credit quality and the mix of products customers choose.
The bank’s common equity tier one capital ratio stood at 13.9%, down 0.2 percentage points from 30 June. HSBC linked the movement to higher risk-weighted assets, valuation effects on debt securities and its previous buyback, partly offset by profits available for regulatory capital purposes. Capital ratios measure resilience relative to risk-weighted exposures; a quarterly reduction should be evaluated alongside the bank’s target range and the composition of the change.
HSBC approved a third interim dividend of 10 US cents per share and plans a further share buyback of up to $1bn, expected to be completed by the release of its full-year results. It had completed an earlier $1bn buyback in September. These programmes return capital to shareholders, but they are also conditional on the bank maintaining sufficient capacity to support lending, investment and regulatory requirements.
The results follow a period of organisational simplification. The bank says operating expenses on its target basis were 1.4% higher year on year, including inflation and planned technology investment, partly countered by cost savings. That mix illustrates the difficulty of interpreting restructuring as an immediate cost reduction. Savings in some operations may be reinvested in systems, staff capabilities or controls elsewhere in the group before showing through in total expenditure.
Within the UK, HSBC recorded increased customer lending activity during the quarter, alongside growth in Hong Kong and other markets. The group also expanded deposit balances, giving it additional funding for banking operations. The rates charged to individual corporate customers will depend on their credit risk, security and borrowing requirements, as well as broader funding conditions and the bank’s allocation of capital between regions.
HSBC continues to invest in technology and organisational changes while returning capital to shareholders. The reported increase in target operating expenses includes inflation and planned spending on systems, partly offset by savings. Its earnings performance therefore reflects both growth in banking activities and the continuing costs of reshaping the business across its principal international markets.
HSBC’s reported third-quarter pre-tax profit reached $9.6bn, while its constant-currency figure excluding notable items was $10bn. The group also announced a $1bn share buyback. Its next financial results will show how banking income, impairment charges and restructuring costs develop after the previous year’s legal provisions cease to affect the annual comparison.
You must be logged in to post a comment.