HSBC Q3 Profits Fall 14% on $1.1B Madoff Legal Hit, Raises 2025 Income Outlook

HSBC reported a 14% decline in pre-tax profits for the third quarter of 2025, falling to $7.30 billion from $8.48 billion the previous year, largely due to a $1.1 billion legal provision related to the Bernard Madoff Ponzi scheme lawsuit and increased operating costs. Despite this profit slump, the bank's revenue rose 5% to $17.79 billion, driven by growth in net interest income and fee income, particularly in Wealth and Premier Banking segments. HSBC maintained its dividend at $0.10 per share and completed a $3 billion share buyback program during the quarter. The bank's net interest margin improved to 1.57%, and it raised its full-year 2025 net interest income forecast to $43 billion, reflecting optimism about policy rates in key markets like Hong Kong and the UK. HSBC emphasized ongoing restructuring efforts to focus on core markets and improve agility, while also acknowledging the challenges posed by historical legal matters that may take years to resolve. Overall, HSBC expects to deliver a mid-teens return on tangible equity for 2025, excluding notable items, despite a seasonally lower forecast for the fourth quarter.