London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

HSBC's Hong Kong shares jump nearly 5% after third-quarter earnings beat estimates

HSBC's Hong Kong shares jump nearly 5% after third-quarter earnings beat estimates

HSBC's reported profit before tax was $3.07 billion in the third quarter, better than the $2.07 billion that analysts had expected, according to estimates compiled by the bank.

Hong Kong-listed shares of HSBC popped on Tuesday after third quarter profits beat market expectations.

Europe’s largest bank by assets reported profit before tax of $3.07 billion in the July-to-September quarter, 36% lower than the $4.84 billion recorded a year ago as it attempts to recover from the economic shock of the coronavirus pandemic.

The third-quarter 2020 profit was also better than the $2.07 billion that analysts had expected, according to estimates compiled by the bank.

Reported revenue was $11.93 billion for the quarter, 11% lower than a year ago.


The latest set of result suggests a bottoming of the credit cycle and the bank is “putting in place all of the building blocks we need to resume dividends,” HSBC’s Chief Financial Officer Ewen Stevenson told CNBC’s “Capital Connection” on Tuesday.

The bank, traditionally favored by investors for its steady dividends, has halted such payouts as British regulators urged commercial lenders to preserve capital.

Here are other highlights of the bank’s financial report card:

* An additional $785 million was set aside in the third-quarter for potential loan losses, bringing provisions for the first nine months of 2020 to $7.64 billion. HSBC said total provisions for the year could be at the lower end of its $8 billion to $13 billion estimate;

* Net interest margin, a measure of loan profitability, was 1.2% in the quarter — down 13 basis points from the previous quarter and 36 basis points lower than a year ago;

* Operating expenses declined by 1% compared with a year ago;

* Common equity tier 1 ratio was 15.6% compared with 15% in the previous quarter.

HSBC shares in Hong Kong closed Tuesday’s trading session at 4.81% higher than the previous day.

Resuming dividend payouts


As the outlook brightens, HSBC said in its third-quarter earnings announcement that it will consider “whether to pay a conservative dividend for 2020.” A decision is expected in February 2021.

“We’re clearly not happy with the way the share prices perform this year. A big part of that has been the impact of Covid-19, the shift in interest rate outlook and the cutting of dividends,” Stevenson told CNBC.



“We do think today’s results (are) the first part of a journey in restoring confidence in the equity story of the bank and the share price. Paying dividends is a critical component of that,” he added.

The bank’s Hong Kong-listed shares have plunged by 47% this year as of Friday, while its London-listed shares dived 45.7% over the same period, data by Refinitiv showed.

In a prepared statement, HSBC’s Chief Executive Noel Quinn said the results were “promising” in light of the “continuing impacts of Covid-19 on the global economy.”

Worst might be over


Before the earnings release, Jackson Wong, asset management director at Amber Hill Capital, said HSBC’s prospects could start to improve if Covid-19 cases around the world don’t get much worse.

“I think the worst probably could be over,” he told CNBC’s “Squawk Box Asia” on Tuesday.

“We haven’t seen a very bright future at this point so it could be (starting) to turn better, but it’s not very robust at this point yet,” he added.

HSBC’s financial results follow that of other European banks, many of which have beaten analysts’ expectations.

Last week, fellow British lender Barclays reported third-quarter net profit that was more than double what analysts had forecast as the bank set aside less money for potential bad loans.

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×