HSBC Holdings Plc reported a third-quarter profit of $7.3 billion, down 14% from a year earlier, as higher operating expenses and legal provisions offset gains in core income.
Operating expenses rose 24% to $10.1 billion, driven by legal and restructuring costs. The bank booked $1.4 billion in provisions, including $1.1 billion related to a Luxembourg court ruling tied to the Bernard Madoff fraud case, and about $300 million for other historical matters.
Net interest income increased 15% to $8.8 billion, supported by higher policy rates and growth in the wealth management business, where income rose about 30% to $2.7 billion. HSBC said it now expects banking net interest income to exceed $43 billion in 2025, up from previous guidance, citing sustained rate benefits in key markets such as the UK and Hong Kong.
The Madoff-related provision is expected to reduce the bank’s Common Equity Tier 1 (CET1) ratio by around 0.15 percentage points, though capital levels remain above regulatory requirements. HSBC’s CET1 ratio stood near 14.5% at the end of the quarter.
In Hong Kong, HSBC shares rose about 2% after the results were released. The bank’s core profit before tax, excluding notable items, increased about 3% from the prior year, reflecting stronger underlying performance.
HSBC said it continues to monitor credit conditions in its key markets, including Hong Kong’s property sector, where higher allowances have been set aside through its subsidiary Hang Seng Bank.