HSBC Holdings Plc reported third-quarter revenue that surpassed analyst expectations, driven by strong performance in its wealth management businesses, even as a $1.1 billion provision tied to the Bernard Madoff fraud cases weighed on overall earnings.
For the three months through September, the London-headquartered bank posted revenue of $17.8 billion, up 5% from a year earlier and above the $16.7 billion consensus estimate compiled by the company. Pretax profit, however, fell 14% to $7.3 billion, reflecting the impact of the legal provision.
Chief Executive Officer Georges Elhedery said the results demonstrate HSBC’s focus on becoming “a simple, more agile, focused bank, built on our core strengths.” He added, “The intent with which we are executing our strategy is reflected in our performance this quarter, despite taking legal provisions related to historical matters.”
The provision was announced just a day earlier and is intended to cover litigation from investors who lost money in the Madoff cases years ago. The quarterly results also mark the first since Elhedery unveiled a $14 billion plan to buy out minority shareholders in Hang Seng Bank, a move that reinforces HSBC’s focus on Hong Kong — its largest individual market and one of its biggest profit contributors.
Despite the hit from the Madoff provision, HSBC’s performance highlights resilience in its core wealth and retail operations, as the bank navigates legal obligations while pursuing strategic growth in key markets.
