HSBC Holdings Plc shares fell more than 6% in Hong Kong after the bank posted earnings that fell short of estimates in the third quarter and kept its outlook for the rest of year unchanged.
Pretax profit rose 32% to $9.6 billion in the period, the London-based lender said Tuesday, falling short of the $9.7 billion company-compiled estimate. Earnings were helped by elevated interest rates, inflows into its wealth business and lower-than-expected credit losses.
Its shares fell as much as 6.75% in Hong Kong trading after the announcement, the biggest intra-day drop since October 2025.
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At the same time, HSBC announced a $1 billion share buyback. That's the second consecutive quarterly buyback for the Asia-focused bank, which resumed capital returns over the summer following an earlier pause linked to its $14 billion acquisition of Hang Seng Bank.
“Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities,” Chief Executive Officer Georges Elhedery said in the statement. HSBC's wealth customer inflows jumped $41 billion in the reported period, up from $25 billion in the second quarter.
HSBC maintained its outlook, reiterating that it remains confident in hitting the medium-term targets set out in February 2026. Those include delivering a return on tangible equity of at least 17% through 2028, excluding notable items.
Even so, analysts at Jefferies said consensus estimates on net interest income for 2027 and 2028 might now be “overly ambitious, which will challenge the shares today.” The lender also flagged emerging pressure on deposits in the UK and Hong Kong, according to a note from Jefferies analysts Joseph Dickerson and Theo Massing.
The lender has over the past couple of years radically overhauled its business following the appointment of Elhedery in September 2024. Under his leadership the bank has shuttered, sold or merged several business lines, cutting thousands of jobs as it looks to refocus its operations on its core Asian markets.
Costs
Costs are an area of focus for investors and analysts, with HSBC saying in August that it would consider boosting its bonus pool if the business's strong performance continued into the second half of the year.
For the quarter, the bank said operating expenses fell by 12% to $8.8 billion, including a “favorable net impact” of $1.4 billion from the non-recurrence of legal provisions a year earlier. Excluding one-time items, expenses rose mainly due to inflation, higher planned technology spending, and the timing of performance-pay accruals, partially offset by savings from the restructuring, the bank said.
Exits Continue
In July, HSBC detailed the sale of its Singapore insurance unit to Allianz SE, and in May agreed to divest its retail and wealth assets in Indonesia to Oversea-Chinese Banking Corp. It's also in the midst of reviewing selective asset assets in Turkey, and also announced the sale of its retail banking business in Egypt.
Investors have lauded Elhedery's restructuring efforts and the company's shares have more than doubled in value since he took over, also rising about 16% this year.
Wealth management has been one of the bank's strongest performing divisions as the lender has focused on attracting a larger slice of Asia's growing ranks of mass affluent to park their money with its advisers and fund managers. The bank recorded double-digit growth in the second quarter despite the backdrop of a Chinese clampdown on cross-border capital flows.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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