HSBC Holdings plc 3Q 2026 Earnings Release

Georges Elhedery, Group CEO, said:

“Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities. It also reflects consistent execution of our strategic priorities with pace, precision and discipline. As we simplify HSBC, we are creating greater capacity to invest, grow and deliver strong returns for our shareholders.”

Financial performance in 3Q26

• Profit before tax increased by $2.3bn or 32% to $9.6bn compared with 3Q25, primarily due to a net favourable impact from notable items of $1.4bn, which reflected the non-recurrence of legal provisions in 3Q25 of $1.4bn. The increase also reflected growth in revenue, mainly from banking net interest income (‘banking NII’) and lower expected credit losses and other credit impairment charges (‘ECL’). Profit after tax increased by $2.1bn or 38% to $7.6bn compared with 3Q25.
• Constant currency profit before tax excluding notable items increased by $0.9bn to $10.0bn compared with 3Q25.
• Annualised return on average tangible equity (‘RoTE‘) in 3Q26 was 17.7% compared with 12.3% in 3Q25.Excluding notable items, annualised RoTE in 3Q26 was 18.2%, a rise of 1.6 percentage points compared with 3Q25.
• Revenue increased by $0.8bn to $18.6bn compared with 3Q25, primarily reflecting growth in banking NII. Fee and other income also increased in our Corporate and Institutional Banking (‘CIB’) business in Wholesale Transaction Banking (‘WTB’) and in Debt and Equity Markets, supported by higher customer activity, and in Investment Distribution and Private Bank in Wealth. This was partly offset by valuation losses in Corporate Centre and the non-recurrence of one-off favourable impacts in 3Q25 in Insurance. Constant currency revenue excluding notable items rose by $0.8bn to $18.7bn.
• Net interest income (‘NII’) of $9.3bn increased by $0.5bn or 6% compared with 3Q25. The increase reflected deposit balance growth and the benefit of reinvestment of our structural hedge at higher yields, partly offset by lower NII from Markets Treasury and an adverse impact of $0.1bn from one-off items in 3Q26. Banking NII increased by $0.6bn to $11.7bn. Banking NII excludes insurance NII, which fell by $0.1bn, and the funding costs associated with the trading book, which remained broadly stable.
• Net interest margin (‘NIM’) of 1.57% was stable compared with 3Q25.
• ECL of $0.8bn decreased by $0.2bn or 17% compared with 3Q25, primarily reflecting a $0.1bn reduction in stage 3 charges related to the Hong Kong commercial real estate (‘CRE’) sector, as well as lower charges in our UK business and International Wealth and Premier Banking (‘IWPB’) business in Mexico.
• Operating expenses of $8.8bn were $1.3bn or 12% lower compared with 3Q25. This included a favourable net impact of $1.4bn from notable items, which reflected the non-recurrence of legal provisions in 3Q25. Excluding notable items, the increase in operating expenses primarily reflected the impact of inflation, higher planned spend and investment in technology, and the phasing of the performance-related pay accrual relative to 3Q25, partly mitigated by the cost reduction benefits from our organisational simplification. Target basis operating expenses were $0.1bn or 1.4% higher than in 3Q25, including the impact of inflation and higher planned spend and investment in technology, partly offset by the cost reduction benefits from our organisational simplification.
• Customer lending balances increased by $7.8bn compared with 2Q26 on a reported basis. On a constant currency basis, lending balances increased by $6.7bn. This primarily reflected growth as we supported our customers to participate in the India Foreign Currency Non-Resident Deposit scheme, together with growth in our UK and Hong Kong businesses. This was partly offset by the classification to held for sale of lending balances associated with the exit of our retail banking business in Australia in our IWPB business.
• Customer accounts increased by $9.1bn compared with 2Q26 on a reported basis. On a constant currency basis, customer accounts increased by $6.5bn, reflecting continued momentum in deposit inflows in our Hong Kong business. In our IWPB business, deposit growth was mainly in India, as we facilitated customer participation in the India Foreign Currency Non-Resident Deposit scheme. This growth was partly offset by retail deposit outflows following our announced exit of our retail banking business in Australia. In CIB, lower deposit balances reflected outflows of short-term balances.
• Common equity tier 1 (‘CET1’) capital ratio of 13.9% decreased by 0.2 percentage points compared with 30 June 2026, reflecting an increase in risk-weighted assets (‘RWAs‘), together with a decrease in the fair value of hold-to-collect-and-sell debt instruments due to higher yields and the impact of the share buy-back announced at our interim results, partly offset by regulatory profits net of dividends.
• The Board has approved a third interim dividend of $0.10 per share. On 28 September 2026, we completed the $1bn share buy-back announced at our interim results. We also intend to initiate a share buy-back of up to $1bn, which we expect to complete by our 2026 full-year results announcement.

Financial performance in 9M26

• Profit before tax increased by $6.0bn or 26% to $29.2bn compared with 9M25. The increase primarily reflected a net favourable impact of $3.7bn from notable items. The increase also reflected revenue growth from an increase in banking NII and higher fee and other income, primarily in Wealth and WTB. Profit after tax of $22.9bn was $4.9bn or 28% higher compared with 9M25.
• The net favourable movement in notable items primarily reflected the non-recurrence of 9M25 dilution and impairment losses of $2.1bn related to our associate Bank of Communications Co., Limited (‘BoCom’) and legal provisions of $1.4bn, together with lower restructuring costs associated with our organisational simplification of $0.3bn. These items were partly offset by disposal losses recognised on the classification to held for sale associated with the planned sale of our business in Malta of $0.3bn in 9M26.
• Constant currency profit before tax excluding notable items increased by $2.0bn to $30.4bn compared with 9M25.
• Annualised RoTE in 9M26 was 18.0%. Excluding notable items, annualised RoTE in 9M26 was 18.8%, a rise of 1.1 percentage points compared with 9M25.
• Revenue increased by $4.5bn or 9% to $56.4bn compared with 9M25, including a net favourable impact from notable items of $0.9bn and a favourable impact from foreign currency translation differences of $0.7bn. The remaining increase reflected higher banking NII, and fee and other income growth in Wealth across our IWPB and Hong Kong businesses, supported by higher customer activity, and in WTB, mainly in our CIB business. Constant currency revenue excluding notable items rose by $2.8bn to $56.8bn compared with 9M25.
• NII increased by $1.9bn compared with 9M25, primarily driven by deposit balance growth, the benefit of reinvestment of our structural hedge at higher yields, and the favourable impact of foreign currency translation differences of $0.4bn. This was partly offset by lower NII from Markets Treasury. Banking NII increased by $2.2bn to $34.6bn, as the deduction for insurance NII reduced by $0.2bn, due to the impact of strategic transactions. The funding costs associated with the trading book, which are also excluded from banking NII, rose by $0.1bn.
• NIM of 1.60% was 3 basis points (‘bps‘) higher compared with 9M25, mainly due to the impact from foreign currency translation differences and the benefit of our structural hedge, partly offset by lower market interest rates.
• ECL of $3.2bn were $0.2bn higher than in 9M25. The 9M26 charge primarily reflected stage 3 charges on wholesale exposures, including a $0.5bn fraud-related, secondary, securitisation exposure with a financial sponsor in the UK in our CIB business. The 9M26 charge also included $0.3bn related to the Hong Kong CRE sector and allowances to reflect uncertainty due to the ongoing conflict in the Middle East. ECL in 9M25 included charges of $0.7bn related to the Hong Kong CRE sector and a charge against a Middle Eastern exposure.
• Operating expenses of $26.2bn were $0.9bn or 3% lower than in 9M25, including a favourable net impact of $1.8bn from notable items, which comprised the non-recurrence of legal provisions in 9M25 of $1.4bn and lower restructuring and other related costs associated with our organisational simplification of $0.3bn. Excluding notable items, the increase in expenses primarily reflected an adverse impact of $0.4bn from foreign currency translation differences, higher planned spend and investment in technology and Wealth, and the impact of inflation, partly mitigated by cost reductions from our organisational simplification. Target basis operating expenses were $0.5bn or 2.0% higher than in 9M25, including higher planned spend and investment in technology and the impact of inflation, partly offset by cost reductions from our organisational simplification.

Outlook

Group financial targets

• We remain confident in achieving the targets we set out in February 2026, including a RoTE of 17% or better for 2026, 2027 and 2028, excluding notable items.
• We continue to target year-on-year growth in revenue from 2026 to 2028, rising to 5% growth in 2028 compared with 2027, excluding notable items and on a constant currency basis.
• We maintain our dividend payout ratio target basis of 50% for 2026, 2027 and 2028. Our target basis payout ratio is calculated as a percentage of earnings per share, excluding material notable items and related impacts.

In respect of 2026

• We continue to expect banking NII of at least $46bn in 2026.
• We continue to expect an ECL charge as a percentage of average gross customer loans of around 45bps (including held for sale loan balances) for 2026. Over the medium term, we retain our planning range of 30–40bps.
• The Group remains on track to deliver year-on-year growth in operating expenses of approximately 1% in 2026 on a target basis. As communicated at our 2026 interim results, should strong business performance continue, we may consider additional performance-related pay, which would increase 2026 target basis cost growth modestly. Our target basis operating expenses measure excludes notable items and includes the impact of simplification-related saves associated with our announced strategic reorganisation.

Capital and regulatory developments

• We continue to assess the anticipated impact of the final Basel 3.1 standards on our capital. We expect, based on our latest modelling, that the impact on the Group CET1 capital ratio at 1 January 2027 will be a benefit of approximately 40–50bps. The final impact will depend on a number of factors, including model and data refinements, portfolio size and composition and supervisory permissions granted. Any related reductions to firm-specific capital requirements are not expected to be significant.
• We intend to continue to manage our CET1 capital ratio within our medium-term target operating range of 14% to 14.5%.