HSBC Exceeds Profit Expectations in Q3, Announces $3 Billion Share Buyback Plan

HSBC posted strong third-quarter results, with net profit rising 9.2% to $6.13 billion, surpassing analysts’ expectations. This growth, driven by higher trading and fee income, prompted the London-based bank to announce a $3 billion share buyback, set to conclude before its 2024 earnings release.

HSBC’s Q3 Profit Rises 9.9% as Trading Income Gains Offset Drop in Interest Earnings

HSBC Holdings reported an increase in third-quarter net profit due to increased fee and trading income and subsequently announced a new share buyback of up to $3 billion.

The London-based bank reported on October 29 that its net profit for the three months ending September 30 increased 9.2% from the previous year to $6.13 billion. That surpassed Visible Alpha's $5.41 billion estimate in a poll of analysts.

Net interest income plummeted by 17% to $7.64 billion; net fee income increased by 4.0% to $3.12 billion, and net income from trading increased by 19% to $5.30 billion. Net interest income is the difference between the interest earned on loans and the interest paid on deposits. The pre-tax profit increased by 9.9% to $8.48 billion.

HSBC intends to commence a share buyback of up to $3 billion, which it anticipates will be finalized within the four months preceding its 2024 results announcement.

HSBC’s New CEO Elhedery Focuses on Cost-Cutting and Streamlining Amid Strategic Shift to Asia

According to the WSJ, anticipated credit losses and other impairment charges were $986 million in the third quarter, a decrease from $1.07 billion in the previous year.

HSBC implemented a revised organizational framework last week to reduce expenditures.

Chief Executive Georges Elhedery assumed responsibility last month and stated that the modifications would streamline the bank's operations and minimize duplication.

Elhedery, the organization's chief financial officer since early 2023, succeeded Noel Quinn as CEO in early September.

The appointment of Elhedery occurred at a critical juncture for the lender, as it sought to balance its relationship with the West and China in the face of escalating geopolitical tensions.

In the past few years, HSBC has transitioned from retail banking in critical Western markets, including the United States, Canada, and France, to expanding in the Middle East and Asia.