HSBC reported on Tuesday a 10% rise in its third-quarter profit to $8.5 billion, beating estimates of $7.6 billion, benefiting from slower-than-expected interest rate cuts.
Financial results
- The London-headquartered, Asia-focused bank said the results were supported by gains in divisions, including its wealth arm, which benefited from higher private banking volumes in Asia.
- HSBC gained 243,000 customers in Hong Kong in the quarter, while overall fee income in wealth rose 32%, its financials results showed. HSBC has targeted becoming the premier wealth bank in Asia, as it has divested other businesses across the world.
- Revenues increased by 5% year-over-year to $17 billion in the quarter ending September, driven by heightened customer activity in wealth products amid volatile market conditions.
- The bank added that it would repurchase shares worth up to $3 billion on the back of a 9.9% rise in pretax profit from a year earlier to $8.48 billion. This is in addition to a $6 billion buyback program announced earlier this year.
- The bank said it will pay an interim dividend of 10 cents per share, its third payout in 2024, following payments worth 41 cents announced earlier this year.
Crucial quote
“There was strong revenue growth and good performances in wealth and wholesale transaction banking,” CEO Georges Elhedery, who took the helm at the British bank last bank, said in a statement.
Shares surge
HSBC shares climbed 3.7% as of 11:09 am AST in Hong Kong afternoon trading.
Restructuring plan
The financial results come days after unveiling a major overhaul of its businesses.
Last week, HSBC announced a significant overhaul, the most extensive in at least a decade, entailing the merger of its global commercial and investment banking units.
This restructuring also involves a broader geographical reorganization, with Hong Kong and the UK becoming standalone units and Asia Pacific and the Middle East being consolidated into an Eastern regional division.
HSBC also announced several changes to its senior officials. Pam Kaur, the bank’s chief risk and compliance officer, has been appointed as the first female chief financial officer (CFO) in HSBC’s 159-year history.
Greg Guyett, CEO of Global Banking and Markets, will move into the newly created role of Chair of the Strategic Clients Group, while Colin Bell, head of Europe, and Stephen Moss, head of the Middle East, will leave the bank.
