Europe's largest bank HSBC reported third-quarter pretax profit of $9.6 billion on Tuesday, meeting analyst estimates, and announced plans to repurchase up to $1 billion in shares by the end of the year. The profit represented a 32% increase from the same period a year earlier, driven by higher revenue, lower credit losses and the absence of legal provisions that had weighed on results in the prior year.
Revenue climbed to $18.6 billion in the third quarter from $17.8 billion a year earlier. Net interest income, a key earnings driver for banks, rose 6%, while the lender also recorded higher fees from its corporate and institutional banking and wealth management operations. Net interest income specifically reached $9.3 billion in the quarter, supported by deposit growth and higher returns from reinvested funds in the bank's structural portfolio.
Operating expenses fell 12% year on year to $8.8 billion, largely because the bank did not record the $1.4 billion in legal provisions that had appeared in the third quarter of the previous year. However, when notable items are excluded from the calculation, expenses actually rose as inflation pressures and higher technology spending offset gains from operational efficiencies.
The results emerge as HSBC considers substantial workforce reductions in its United Kingdom wealth management division as part of a wider strategy to incorporate artificial intelligence into its operations. For savers and borrowers in the US with HSBC accounts, the strong profit and cost discipline suggest the bank will likely maintain competitive deposit rates and lending terms, though any significant restructuring could affect service availability or staffing levels.