HSBC’s Q3 profit drops 14% but beats forecasts on higher revenue

London: HSBC reported a 14% drop in third-quarter profit but still managed to beat market expectations, supported by higher revenue and strong net interest income.

The bank’s profit before tax for the quarter ended September stood at $7.3 billion, compared to $8.5 billion a year earlier. Analysts had expected $5.98 billion, according to HSBC’s own compiled estimates.

Revenue rose to $17.8 billion, surpassing forecasts of $17.05 billion, helped by growth in its wealth and personal banking division and higher interest income.

The decline in profit was mainly due to increased operating expenses, including a $1.4 billion legal provision linked to ongoing litigation in Luxembourg related to the Bernard Madoff investment fraud case.

HSBC said it recorded a $1.1 billion provision after a Luxembourg court ruling against its local unit, though the bank plans to appeal the decision.

The provision is expected to reduce the bank’s Common Equity Tier 1 (CET1) capital ratio by about 15 basis points.

Despite the setback, HSBC said it remains confident in its capital position and outlook for 2026, citing stable loan growth and improving global demand across Asia and the Middle East.