HSBC Q3 Profit Down, Revenues Rise; Lifts FY25 Banking NII View

(RTTNews) - British lending major HSBC Holdings Plc (HSBA.L, HSBC) reported Tuesday weak profit in its third quarter amid a 24% growth in operating expenses, despite higher revenues. Further, the company lifted its forecast for fiscal 2025 banking Net interest income.

In Hong Kong, HSBC shares were gaining around 1.1 percent to trade at HK$103.100.

In the third quarter, profit before tax fell 14 percent to $7.30 billion from last year's $8.48 billion.

Profit attributable to ordinary shareholders of the parent company declined to $4.87 billion from last year's $6.13 billion. Earnings per share were $0.28, compared to $0.34 a year ago.

Adjusted profit before tax was $9.10 billion, compared to $8.73 billion a in the prior year. Basic adjusted earnings per share were $0.36, compared to $0.34 last year.

Operating expenses grew to $10.08 billion from last year's $8.14 billion.

Revenue grew 5 percent to $17.79 billion from prior year's $17 billion, benefited mainly by growth in fee and other income in Wealth in International Wealth and Premier Banking and Hong Kong business segments, supported by higher customer activity.

Adjusted revenue increased 4 percent year-over-year to $17.90 billion.

Net operating income grew to $16.78 billion from $16.01 billion last year. Net interest income climbed 15 percent from last year to $8.78 billion. Net interest margin of 1.57 percent increased by 11 basis points from prior year's 1.46 percent.

Further, the Board has approved a third interim dividend for 2025 of $0.10 per share.

Looking ahead, HSBC now expects banking Net interest income to be $43 billion or better in 2025, reflecting increased confidence in the near-term trajectory for policy rates in key markets, including in Hong Kong and the UK.

The bank previously expected banking NII of around $42 billion in 2025.

The company said it expects to deliver a mid-teens or better RoTE for 2025, excluding notable items. The guidance reflects a seasonally lower RoTE in the fourth quarter, which includes historically lower client activity in Wealth and certain cost items specific to the fourth quarter.

Further, the company maintained confidence in its ability to deliver mid-teens RoTE target, excluding notable items for 2026 and 2027.

HSBC continues to expect double-digit percentage average annual growth in fee and other income in Wealth over the medium term.

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