HSBC third-quarter revenue misses forecasts, shares fall as bank announces $1bn buyback

LONDON: HSBC's shares fell sharply on 27 October 2026 after the bank reported third-quarter revenue below analysts' forecasts, even as its profit rose strongly.

Pre-tax profit for the quarter rose 32% to $9.6bn. That was broadly in line with the consensus estimate of $9.69bn. Revenue rose 5% to $18.6bn, against forecasts of about $19bn according to Reuters. Another consensus figure put the forecast at $18.9bn.

Banking net interest income was about $11.6bn, some $247m below projections. Wealth management revenue was flat at $2.7bn, against a consensus forecast of $2.8bn. The division had grown 15% and 23% in the first two quarters of the year. Chief executive Georges Elhedery has made wealth management central to the bank's strategy.

Shares fell about 6% in Hong Kong. In London they dropped 7% in early trading to 1,269.0p, according to City AM. The fall put the bank at risk of losing its position as the largest listed company in Europe by market capitalisation.

HSBC announced a new share buyback of up to $1bn, the same as last quarter. It declared an interim dividend of $0.10 a share, worth about $1.7bn. Together, the payouts could total around $2.7bn. The bank said it remained on track to meet its profitability targets through 2028.

Investors had hoped for higher targets. "There is sometimes a market expectation that we upgrade guidance or targets," finance director Pam Kaur said.

Expected credit losses fell 17% to $800m, helped by smaller charges on Hong Kong commercial property. Operating costs fell 12% to $8.8bn. The year-earlier quarter had included a $1.1bn provision after a Luxembourg court dismissed the bank's appeal in a case linked to the Bernie Madoff fraud.

"Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities," Mr Elhedery said. "As we simplify HSBC, we are creating greater capacity to invest, grow and deliver strong returns for our shareholders."

The bank is midway through an overhaul that has included cutting layers of management and using artificial intelligence to reduce back-office costs.

The results came a day before Chancellor John Healey delivers his first Budget. Banks are widely expected to face higher taxes. Campaigners and parts of the Labour Party have pressed for a bigger levy after the industry's strong profits this year. A 5% increase in the UK banking surcharge, which is charged on top of corporation tax, is expected to raise about £2bn a year.