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HSBC Holdings plc said in its third-quarter earnings release that profit before tax for the period ended September 30 rose 32 percent to 9.6 billion dollars from 7.3 billion dollars a year earlier. The increase reflected a 1.4 billion dollar net favourable impact from notable items including the non-recurrence of legal provisions booked in the prior year together with revenue growth and lower expected credit losses. Profit after tax climbed 38 percent to 7.6 billion dollars while the bank noted that constant currency pre-tax profit excluding notable items increased by 900 million dollars to 10 billion dollars.
The earnings release showed revenue rising 800 million dollars to 18.6 billion dollars primarily from banking net interest income that advanced 6 percent to 9.3 billion dollars on deposit balance growth and higher yields from structural hedge reinvestment. Operating expenses fell to 8.8 billion dollars from 10.1 billion dollars a year earlier as part of the cost-cutting drive led by chief executive Georges Elhedery. Net interest margin remained stable at 1.57 percent even as the bank absorbed a 100 million dollar one-off adverse impact in the quarter.
Annualised return on average tangible equity reached 17.7 percent in the quarter compared with 12.3 percent in the year-earlier period according to the bank’s statement. HSBC reported that Hong Kong drove deposit growth with 21 billion dollars added to customer accounts while balances in the United Kingdom remained flat. The lender’s cost-efficiency ratio improved to 47.4 percent from 56.6 percent in the prior-year quarter.
Georges Elhedery said in the earnings release “Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities. It also reflects consistent execution of our strategic priorities with pace precision and discipline. As we simplify HSBC we are creating greater capacity to invest grow and deliver strong returns for our shareholders.”
The board approved a third interim dividend of 0.10 dollars per share the release stated. HSBC completed a 1 billion dollar share buy-back announced at its interim results on September 28 and now intends to initiate a new buy-back of up to 1 billion dollars to be completed before its full-year 2026 results. The common equity tier one capital ratio stood at 13.9 percent at the end of the quarter.
HSBC confirmed it remains on track to meet the targets set in February 2026 with expectations of year-on-year revenue growth from 2026 to 2028 including a 5 percent increase in 2028 compared with 2027 on a constant currency basis excluding one-off items. The nine-month pre-tax profit through September reached 29.2 billion dollars up from 23.1 billion dollars in the same period of 2025 according to the earnings release. The performance comes as Europe’s largest bank by market value continues restructuring efforts that saw it raise its annualised savings target to 2 billion dollars.
