HSBC Holdings (NYSE:HSBC) (LON:HSBA) reported a significant surge in its Q3 2023 pre-tax profit, which rose to $7.7 billion, a substantial increase from the $3.2 billion reported in Q3 2022. This robust growth led to a 1.2% rise in pre-market trading shares. The bank's total revenues also experienced a notable upswing, climbing by 40.4% YoY to reach $16.16 billion, primarily due to increased net interest income.
The Commercial Banking segment of HSBC saw a 40% YoY rise in pre-tax profit to $2.85 billion. Conversely, the Global Banking and Markets segment witnessed a decrease of 10% to $1.32 billion, attributed to higher costs. The Corporate Centre segment reported a pre-tax profit of $765 million.
On Monday, HSBC announced a third interim dividend of 10 cents per share and revealed plans for an additional share buyback of up to $3 billion, which is expected to be completed by February 21, 2024.
For the year 2023, HSBC anticipates net interest income above $35 billion and targets a 3% operating expense growth. The bank expects additional expenses due to technology and operations expenditures and performance-related pay increases. It also plans to manage the CET1 ratio within its medium-term target of 14-14.5% and expects ECL charges to be around 40 basis points.
Moreover, HSBC anticipates maintaining a dividend payout ratio of 50% for both 2023 and 2024. In comparison with other major banks, Barclays reported a Q3 2023 net income of £1.27 billion ($1.61 billion), down by 16% YoY due to higher credit impairment charges, while Deutsche Bank reported a Q3 2023 profit of €1.03 billion ($1.12 billion), down by 7.5% YoY.
HSBC is focusing on initiatives to improve operating efficiency and increase its market share in Asia. As part of these plans, the bank expects a return on tangible equity in the mid-teens for 2023 and 2024, although this would naturally lead to increased expenses.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.