HSBC reported a 5% increase in revenue, reaching $17 billion for the third quarter, surpassing market expectations. Its pre-tax profit rose by 10% to $8.5 billion compared to the previous year. The bank also announced a new $3 billion stock buyback plan, bringing the total announced buybacks for the year to $9 billion.
The impressive earnings performance was driven by robust revenue growth in wealth management and personal banking sectors, despite a slight decrease in net interest margin from 1.7% to 1.5%. Basic earnings per share increased to 34 cents, up from 29 cents in the same period last year. However, operational expenses rose by 2% due to higher technology and investment spending.
Following the earnings report, HSBC's stock surged by 3.69% in Hong Kong trading. Although lower interest rates pose potential challenges to banking profitability, senior equity analyst Michael Makdad emphasized HSBC's stable net interest income despite the narrowing margin.
Earlier this month, reports suggested potential management changes aimed at cost savings under CEO Georges Elhedery. Additionally, HSBC plans to restructure its business into four streamlined departments, effective January, to enhance agility and simplify processes. The bank appointed its first female CFO in a major reform move.
