HSBC has reported a significant surge in its Q3 profits for 2023, which more than doubled to $7.7 billion. The bank's revenue also saw an impressive increase, climbing 40% to reach $16.2 billion. These robust figures were primarily driven by higher interest income from rising rates and a $2.1 billion reversal of an impairment associated with its French retail business sale.
The bank's net interest income provided a substantial boost, contributing $27.5 billion to the overall figures. Despite inflation and tech costs leading to a slight uptick in operating expenses, savings from a completed cost-saving program helped keep these additional costs under control.
For the first nine months of 2023, HSBC's pre-tax profit surged 145% to $29.4 billion. This strong performance led the bank to approve a third interim dividend of 10 cents, bringing the total dividends for the year to $0.30 per share.
In addition, HSBC announced another $3 billion share buyback - the third one in 2023 alone, bringing the total buybacks for the year to $7 billion. This move is expected to impact its CET1 capital ratio by 0.4 percentage points.
HSBC's CEO Noel Quinn expressed confidence in the bank's substantial distribution capacity, ongoing investment in growth, and progress towards achieving its mid-teens return on tangible equity target for 2023. With three consecutive quarters of strong performance under its belt, HSBC seems well-positioned to meet its targets for the year.
InvestingPro Insights
According to data from InvestingPro, HSBC's market cap stands at a robust $140.22 billion. The bank also boasts a low P/E ratio of 6.04, indicating a potentially undervalued stock. Furthermore, the revenue growth over the last twelve months as of Q2 2023 is an impressive 28.13%, which aligns with the strong performance reported in the article.
InvestingPro Tips reveal that HSBC has consistently increasing earnings per share and has raised its dividend for three consecutive years. This is consistent with the article's mention of a third interim dividend and the ongoing share buyback program. Despite weak gross profit margins, HSBC is a prominent player in the banking industry and is expected to remain profitable this year.
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