HSBC pre-tax profit jumps 32% to $9.6 billion in third quarter
Key Facts
HSBC reported on October 27 that third-quarter pre-tax profit rose $2.3 billion, or 32%, to $9.6 billion from the same period in 2025, driven mainly by a positive net impact of $1.4 billion from notable items. This included the non-recurrence of legal provisions recorded in the same quarter last year. Net interest income rose 6% to $9.3 billion, while revenue increased $0.8 billion to $18.6 billion. Expected credit losses and other impairment charges fell 17% to $0.8 billion. Despite annual profit growth, earnings fell short of analysts’ estimates, and the bank’s Hong Kong-listed shares declined during the same day’s trading.
Pre-tax profit was $9.63 billion, compared with $7.30 billion in the third quarter of 2025, but missed Bloomberg’s estimate of $9.7 billion, according to Investing.com. The gap between reported profit growth and operating performance highlights the effect of notable items, which added $1.4 billion to the year-on-year comparison. On underlying income, net interest income rose $0.5 billion, or 6%, to $9.3 billion. HSBC attributed the increase to deposit balance growth and higher-yielding reinvestment of structural hedges. This was partly offset by lower Markets Treasury income, the bank said.
Revenue increased $0.8 billion to $18.6 billion compared with the third quarter of 2025, supported mainly by growth in banking net interest income. HSBC also cited higher fee and other income in some of its corporate and wealth banking businesses. By contrast, expected credit losses and other impairment charges fell $0.2 billion, or 17%, to $0.8 billion. The bank attributed this mainly to a $0.1 billion decline in Stage 3 charges related to commercial real estate in Hong Kong. Charges also fell by less in the United Kingdom and Mexico, according to the statement.
The annualised return on average tangible equity was 17.7% in the third quarter, compared with 12.3% in the same period of 2025. The return rose to 18.2% excluding notable items, according to the bank’s figures. For the first nine months of 2026, pre-tax profit increased 26% to $29.2 billion. Net profit after tax for the same period rose 28% to $22.9 billion. These results through September show annual profit growth alongside an improvement in the quarterly return on tangible equity.
Group Chief Executive Georges Elhedery said customers “continue to come to us to navigate uncertainty and capture new opportunities.” He added that simplifying HSBC expands its ability to invest, grow and deliver returns to shareholders. The bank said its board approved a third interim dividend of $0.10 per share, with a total expected payment of about $1.71 billion. The dividend is payable on December 17 to shareholders on the register on November 6. HSBC also said it intends to begin a share buyback of up to $1 billion shortly after the third-quarter results, with the programme to be completed before the 2026 annual results announcement.
HSBC reaffirmed its forecast for banking net interest income of at least $46 billion in 2026. It also maintained its return on tangible equity target of 17% or better in each of 2026, 2027 and 2028, excluding notable items. In the market, the bank’s shares fell 4.29% to HK$136.10 in an Investing.com update dated October 27. The stock had touched an intraday low of HK$134.70, its lowest level since June 11. The Hang Seng Index fell 0.48%, leaving HSBC shares underperforming the broader index in the cited trading session.
HSBC set February 23, 2027, as the date for announcing its 2026 annual results. That announcement will be the next milestone for assessing the bank’s performance over the year, following quarterly results that showed growth in profit, revenue and return on tangible equity. The bank’s guidance for banking net interest income of at least $46 billion remains tied to the 2026 financial year. Its return on tangible equity target also covers 2026, 2027 and 2028, excluding notable items. The forthcoming annual results announcement will include full-year 2026 financial data.