HSBC Q3 profit up 8 per cent as credit losses fall 17 per cent year on year
HSBC reported an 8 per cent rise in pre-tax profit to $2.565bn for the third quarter, with revenue up 6 per cent to nearly $4.1bn. Expected credit losses fell 17 per cent year on year to $800m, driven by lower provisions in Hong Kong commercial real estate, UK operations and Mexican wealth managemen
HSBC reported a pre-tax profit of $2.565bn for the third quarter on a constant currency basis, up 8 per cent year on year, the bank announced on 27 October. Revenue rose 6 per cent to nearly $4.1bn, while operating expenses fell 12 per cent to $8.8bn.
Expected credit losses for the quarter amounted to $800m, a 17 per cent decline from the same period last year. The reduction reflected a $100m decrease in stage 3 provisions related to Hong Kong commercial real estate, as well as lower provisions in UK operations and the international wealth management and premier banking business in Mexico.
On a reported basis, HSBC posted revenue of $18.6bn for the quarter, up 5 per cent, mainly driven by higher net interest income from its banking operations.
As of the end of September, the bank's common equity tier 1 (CET1) capital ratio stood at 13.9 per cent, down 0.2 percentage points from the end of June. The decline reflected an increase in risk-weighted assets, a fall in the fair value of debt instruments held for contractual cash flow and sale due to rising yields, and the impact of share buybacks. The decrease was partly offset by regulatory-required profits.
HSBC said it remained confident of achieving a three-year average return on tangible equity of 17 per cent or higher, including the current year. It maintained a target dividend payout ratio of 50 per cent and aimed to achieve 5 per cent revenue growth in 2028 compared with 2027.
The group left unchanged its guidance for the full year on net revenue, expected credit loss provisions as a percentage of average gross customer loans, target operating expenses and medium-term CET1 ratio targets.