HSBC has unveiled plans for a bumper buyback despite its third-quarter revenue missing market expectations, after banking net interest income and its wealth division lagged behind expectations.
The FTSE 100 bank said it would return $1bn to shareholders through a buyback programme after it scored a $9.63bn profit for the quarter. This was broadly in line with the consensus expectations of $9.69bn.
But revenue missed the mark after HSBC reported $18.6bn for the period, below the forecast of $18.9bn. The over $300m miss followed underperformance in banking net interest income, which delivered about $11.6bn, some $247m below expectations.
Revenue in the bank’s wealth division was also softer than expected at $2.7bn, compared to a $2.8bn consensus.
The firm also revealed an interim dividend of $0.1 per ordinary share, which equates to around $1.7bn being dished out to investors. Along with the buyback, this could bring returns for the quarter to around $2.7bn.
“Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities. It also reflects consistent execution of our strategic priorities with pace, precision and discipline,” Georges Elhedery, group chief executive, said.
“As we simplify HSBC, we are creating greater capacity to invest, grow and deliver strong returns for our shareholders.”
HSBC set to fall in UK tax grips
Operating expenses at the bank dropped 12 per cent to $8.8bn, mainly due to the absence of a major legal charge that dragged up the previous year’s figure.
HSBC made a $1.1b provision in its third quarter results in 2025 following a Luxembourg court rejecting the bank’s appeal in regards to an investment fraud case associated with the Bernie Madoff scandal.
The legal claims against the bank revolved around allegations that it breached its supervisory duties by failing to properly safeguard or verify the existence of the assets and thereby facilitating the continuation of the fraud.
Just over a year ago, the bank also revealed plans to buy out minority shareholders in Hong Kong’s Hang Seng Bank. The group paid a 30.3 per cent premium on the deal, and said it would be funded by suspending its buyback programs. It said it would resume buybacks in August following a second-quarter profit jump.
The update from HSBC – which is Europe’s biggest lender by market value – comes less than a week before Chancellor John Healey delivers his maiden Budget, where banks are expected to be targeted with a punishing tax raid.
Healey has faced fierce lobbying from the left of the Labour party and trade unions to slap higher taxes on the sector following the bumper profits reaped by the industry this year. A five per cent hike to the UK banking surcharge, which sits on top of corporation tax, is expected to raise some £2bn a year.