London Daily

Focus on the big picture.
Thursday, Oct 02, 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
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×