HSBC Holdings plc reported a profit before tax of $7.3 billion for the third quarter of 2025, down by $1.2 billion compared to the same period last year. The decline was mainly due to higher operating expenses, including legal provisions totaling $1.4 billion, partially offset by revenue growth driven by increased banking net interest income and a strong performance in Wealth management.
Group CEO Georges Elhedery stated: “We are becoming a simple, more agile, focused bank, built on our core strengths. The intent with which we are executing our strategy is reflected in our performance this quarter, despite taking legal provisions related to historical matters. The positive progress we are making gives us confidence in our ability to upgrade our targets and we now expect 2025 RoTE excluding notable items to be mid-teens, or better. We remain fully focused on helping our customers navigate new economic realities, putting their changing needs at the heart of everything we do.“
Profit after tax for the quarter stood at $5.5 billion, also $1.2 billion lower than last year’s third quarter results. On a constant currency basis and excluding notable items, profit before tax rose 3% year-on-year to $9.1 billion.
Annualised return on average tangible equity (RoTE) for the quarter was 12.3%, down from 15.5% a year earlier; however, when excluding notable items such as legal costs and restructuring charges, annualised RoTE improved by half a percentage point to 16.4%.
Revenue reached $17.8 billion in the third quarter of 2025—a rise of 5% over the same period last year—supported by growth in Wealth segments and increased customer activity in International Wealth and Premier Banking (IWPB) as well as Hong Kong business units.
Net interest income climbed by 15% from last year to reach $8.8 billion during the quarter; this included benefits from not repeating losses seen previously from early redemption of legacy securities and growth from deposit balances.
Operating expenses increased significantly—by 24%—to reach $10.1 billion for the quarter due mainly to legal provisions relating to historic matters ($1.4bn), with most attributed to developments connected with claims related to Madoff securities fraud and historical trading activities at HSBC Bank plc.
Customer lending balances saw modest increases compared with Q2 2025; adjusted for currency movements these balances grew by $5.6 billion driven primarily by commercial lending growth in key regions such as Hong Kong and Singapore.
The Board has approved a third interim dividend for 2025 of $0.10 per share; additionally, HSBC completed its previously announced $3bn share buy-back on October 24.
For the first nine months of this year (9M25), reported profit before tax decreased by $6.9bn compared with the same period last year due largely to non-recurrence of gains linked with disposals made in Canada and Argentina during that time frame alongside impairment losses associated with an associate company (BoCom).
Looking ahead, HSBC expects mid-teens or better RoTE for full-year 2025 excluding notable items based on ongoing business momentum across its four main divisions into Q3 as well as progress against strategic priorities outlined earlier this year.
The bank anticipates delivering banking net interest income (NII) of at least $43bn next year given expectations around policy rates particularly within Hong Kong and UK markets while maintaining cost discipline targeting approximately three percent operating expense growth versus current levels.