Europe’s largest bank HSBC revealed third-quarter results on Tuesday that included pretax profit largely aligned with analyst forecasts alongside a commitment to repurchase up to $1 billion in shares. The lender’s quarterly revenue reached $18.6 billion, up from $17.8 billion in the equivalent period a year prior, while banking net interest income increased 6%. The bank also reported higher fee income generated through its corporate and institutional banking operations as well as its wealth management division.
Market reaction to the results proved negative, with HSBC’s London-listed shares declining 6.5% in early European trading, marking the worst session since April 3, 2025. Hong Kong-listed shares fell 2.95% following the earnings announcement. Citi analysts characterized the results as a mixed set of figures, noting the bank missed revenue expectations by 2 percent. However, the lender achieved an 18.8% return on tangible equity for the year to date, substantially exceeding its medium-term guidance target of approximately 17%.
Third-quarter pretax profit rose 32% year over year to $9.6 billion, a performance bolstered by the absence of $1.4 billion in legal provisions recorded in the same quarter of the prior year. Higher revenue combined with lower credit losses contributed to the earnings improvement. Net interest income climbed to $9.3 billion in the quarter, supported by deposit growth and reinvestment of the bank’s structural hedge at higher yields. Operating expenses decreased 12% annually to $8.8 billion, primarily reflecting the non-recurrence of legal provisions from a year earlier, though expenses rose when excluding notable items due to inflation and increased technology spending.
Looking forward, HSBC sustained its forecast for banking net interest income of at least $46 billion in 2026 and reiterated its target for return on average tangible equity of 17% or higher through 2028, excluding notable items. The bank projected revenue growth annually through 2028, with a target of 5% growth in 2028 compared with 2027 on a constant currency basis and excluding notable items. The bank also stated it would complete an additional $1 billion in share repurchases before announcing full-year 2026 results.
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