Highlights

  • HSBC Holdings reported profit before tax fell to USD 7.3bn in Q3, down USD 1.2bn year-on-year.
  • Legal provisions of USD 1.4bn weighed on quarterly results.
  • Board declared third interim dividend of USD 0.10 per share.

HSBC Holdings plc (LSE:HSBA) released its earnings for the third quarter ended 30 September 2025, reporting a profit before tax of USD 7.3bn, down USD 1.2bn from 3Q24. The decline reflected an increase in operating expenses, primarily due to legal provisions of USD 1.4bn, partially offset by higher revenue. Profit after tax was USD 5.5bn, also USD 1.2bn lower year-on-year.

On a constant currency basis excluding notable items, profit before tax was USD 9.1bn, up 3% from 3Q24, supported by revenue growth driven by continued performance in Wealth.

Revenue and Net Interest Income

Total revenue rose by USD 0.8bn or 5% to USD 17.8bn compared with 3Q24. The growth reflected higher banking net interest income (NII) and performance in Wealth within the International Wealth and Premier Banking and Hong Kong segments. Fee and other income declined in Global Foreign Exchange and Debt and Equity Markets amid lower client activity.

Net interest income increased 15% to USD 8.8bn, supported by deposit growth and benefits from HSBC’s structural hedge, partially offset by the disposal of the Argentina business. The net interest margin (NIM) was 1.57%, up 11 basis points from 3Q24.

Credit Losses and Expenses

Expected credit losses (ECL) of USD 1.0bn were stable year-on-year, mainly related to wholesale exposures, including charges in the Hong Kong commercial real estate sector and a Middle Eastern exposure.

Operating expenses rose 24% to USD 10.1bn, reflecting legal provisions of USD 1.4bn, restructuring costs of USD 0.2bn, and higher technology investment and inflation impacts. On a target basis, operating expenses were USD 8.4bn, up 3% from 3Q24.

Capital and Balance Sheet

The Common Equity Tier 1 (CET1) ratio stood at 14.5%, down 0.1 percentage points from 2Q25, impacted by legal provisions, partly offset by a reduction in risk-weighted assets.

Customer lending balances rose by USD 1.2bn, while customer accounts increased by USD 18.6bn quarter-on-quarter on a reported basis.

Management Commentary

Group CEO Georges Elhedery said:
"We are becoming a simple, more agile, focused bank, built on our core strengths. The intent with which we are executing our strategy is reflected in our performance this quarter, despite taking legal provisions related to historical matters. The positive progress we are making gives us confidence in our ability to upgrade our targets and we now expect 2025 RoTE excluding notable items to be mid-teens, or better."

Outlook

HSBC expects to deliver a mid-teens or better RoTE for 2025, excluding notable items, supported by earnings momentum across its businesses. The bank forecasts banking NII of USD 43bn or better in 2025 and continues to expect ECL charges to remain around 40bps of average gross loans.

The Group maintains its CET1 capital ratio target range of 14%-14.5% and a 50% dividend payout ratio, excluding material notable items.

Share Performance

HSBA shares are currently trading at GBX 1,033.80, up 2.97% from its previous close of GBX 1004.