HSBC reported a solid third quarter, boosted by strong performance in wealth, personal banking, and investment banking, resulting in a 9.9% year-on-year increase in pre-tax profit to $8.5bn (€7.9bn). This strong showing allowed HSBC to announce an additional $3bn (€2.8bn) share buyback, bringing total returns to shareholders to $9bn (€8.3bn) for 2024. A third interim dividend of $0.10 per share was also approved, underscoring confidence in the bank’s strategic direction under new CEO Georges Elhedery.
The bank attributed the earnings surge to heightened client activity, driven partly by China’s September stimulus, which spurred demand in wealth products and foreign exchange, especially in Hong Kong. Despite this growth, HSBC saw a 17% drop in net interest income due to business disposals, higher liabilities costs, and the early redemption of legacy securities, aligning with global banking trends. The bank maintained its mid-teens return on average tangible equity (RoTE) target for 2024 and 2025, signaling stability despite a changing economic landscape.
As part of a recent restructuring plan, HSBC is merging its commercial and investment banking divisions to streamline operations and cut costs. This will create an “Eastern Markets” branch covering Asia-Pacific and the Middle East and a “Western Markets” branch covering the UK, Europe, and North America, allowing each region a tailored growth strategy amid rising geopolitical tensions. Expected to generate $40bn (€36bn) in revenue annually, this super-division will be the bank’s largest, with further details anticipated in the 2024 annual results.
