HSBC Plans $1 Billion Share Buyback After Quarterly Profit Rises 32%
Key Facts
HSBC said it plans to launch a new share buyback programme worth up to $1 billion as it reported results for the third quarter of 2026. Profit before tax was $9.6 billion, up 32% from the same period a year earlier. Profit after tax rose 38% to $7.6 billion, the bank said. The board also approved a third interim dividend of 10 cents per share. The bank expects to complete the new buyback before announcing its 2026 full-year results.
Reported revenue rose to $18.6 billion, an increase of $0.8 billion year on year. On a constant-currency basis and excluding notable items, revenue also increased by $0.8 billion to $18.7 billion. HSBC said growth in net interest income from banking contributed to the improvement in revenue. That income rose by $0.6 billion to $11.7 billion in the quarter. The net interest margin was unchanged at 1.57% compared with the third quarter of 2025.
The bank said fee income and other revenue increased in wholesale transaction banking and debt and equity markets, supported by higher client activity. It said these activities included wholesale transaction banking and debt and equity markets within its Corporate and Institutional Banking business. This was partly offset by valuation losses in the Corporate Centre. The exceptional positive effects recorded in its insurance business also did not recur. HSBC said the rise in profit before tax also benefited from lower expected credit losses.
The year-on-year comparison of profit before tax was also affected by a net positive impact from notable items of $1.4 billion. HSBC attributed this impact mainly to the non-recurrence of legal provisions of the same amount recorded in the third quarter of 2025. Profit growth therefore combined improved interest and fee income with a difference in the impact of notable items between the two periods. In the first half of 2026, the bank had reported profit before tax of $19.5 billion, up 23% from the corresponding period. The first-half increase reflected, according to the bank's announcement at the time, a net positive impact from notable items of $2.2 billion, alongside growth in interest and fee income.
For the first nine months of 2026, profit before tax was $29.2 billion, up 26% year on year. Profit after tax for the period rose to $22.9 billion, up 28% compared with the first nine months of 2025. Meanwhile, the Common Equity Tier 1 capital ratio was 13.9% at the end of the third quarter. The ratio declined 0.2 percentage points from the end of June. The bank attributed the decrease to higher risk-weighted assets, a fall in the value of some debt instruments and the impact of the buyback, partly offset by regulatory profits.
HSBC completed a $1 billion share buyback on 28 September that it had announced with its first-half results. The new announcement follows completion of that programme, without the bank describing the new buyback as the second consecutive one. In its first-half results, the bank said it expected net interest income from banking of at least $46 billion in 2026. It also maintained its target for return on average tangible equity, excluding notable items, at 17% or more in each of 2026, 2027 and 2028. It set a dividend payout ratio target of 50% for the same three years.
HSBC shares closed at $91.17 on 26 October 2026, according to EL7 data. The stock closed at $92.74 on 20 October, then $93.9 on 21 October and $91.89 on 22 October. On 23 October, the shares closed at $90.68. The 26 October close came before the results announcement in the bank's statement. HSBC is scheduled to announce its 2026 full-year results on 23 February 2027.