HSBC 3Q25: RoTE Target Raised Amid Legal Provisions

TL;DR

HSBC 3Q25: Profitability target raised to mid-teens RoTE despite legal costs. Strategy paying off.

AI Summary

HSBC Holdings plc announced its 3Q25 earnings on October 28, 2025. Despite taking legal provisions for historical matters, the company is seeing positive progress and expects its 2025 RoTE (Return on Tangible Equity) excluding notable items to be mid-teens or better. Group CEO Georges Elhedery expressed confidence in the company's strategy execution and focus on becoming a simpler, more agile bank.

Why It Matters

HSBC is raising its profitability targets despite incurring costs for past legal issues, indicating strong underlying business performance and strategic execution.

Risk Assessment

Risk Level: medium — The filing mentions legal provisions for historical matters, which introduces uncertainty and potential future financial impact.

Key Numbers

• mid-teens — 2025 RoTE excluding notable items (Updated profitability target indicating improved performance expectations.)

Key Players & Entities

• HSBC Holdings plc (company) — Filer of the report and subject of the earnings release.
• Georges Elhedery (person) — Group CEO of HSBC Holdings plc, quoted in the release.
• 3Q25 (date) — The earnings period covered by the release.
• 2025 (date) — The year for which RoTE targets are being updated.

FAQ

Key Financial Figures

• $7.3b — 0;   Reported profit before tax of $7.3bn was $1.2bn lower compared with 3Q24 .
• $1.2b — eported profit before tax of $7.3bn was $1.2bn lower compared with 3Q24 . The reducti
• $1.4b — in 3Q25, including legal provisions of $1.4bn. This was partly offset by revenue gro
• $5.5b — uity Markets.  Profit after tax of $5.5bn was $1.2bn lower than in 3Q24. -&#xA
• $9.1b — before tax excluding notable items was $9.1bn, an increase of $0.3bn or 3% compared
• $0.3b — otable items was $9.1bn, an increase of $0.3bn or 3% compared with 3Q24,   as re
• $0.8b — #xA0;    Revenue increased by $0.8bn or 5% to $17.8bn compared with 3Q24. &
• $17.8b — 0; Revenue increased by $0.8bn or 5% to $17.8bn compared with 3Q24.   There was g
• $0.5b — revenue excluding notable items rose by $0.5bn to $17.9bn. -   &#xA0
• $17.9b — cluding notable items rose by $0.5bn to $17.9bn. -       Ne
• $8.8b — ;   Net interest income ('NII') of $8.8bn increased by $1.1bn or 15% compared wi
• $1.1b — t income ('NII') of $8.8bn increased by $1.1bn or 15% compared with 3Q24,   whic
• $0.7b — the trading book compared with 3Q24 by $0.7bn, resulting in  an increase in &#x
• $11.0b — n   banking NII of $0.5bn or 4% to $11.0bn. -       Ne
• $1.0b — #xA0; Expected credit losses ('ECL') of $1.0bn were stable compared with 3Q24.  

Filing Documents

• a0904fnew.htm (6-K) — 3796KB
• 0001654954-25-012267.txt ( ) — 3797KB

From the Filing

HOLDINGS PLC EARNINGS RELEASE 3Q25 a0904fnew FORM 6-K   SECURITIES AND EXCHANGE COMMISSION   Washington, D.C. 20549       Report of Foreign Private Issuer   Pursuant to Rule 13a - 16 or 15d - 16 of   the Securities Exchange Act of 1934       For the month of October   HSBC Holdings plc   42nd Floor, 8 Canada Square, London E14 5HQ, England   (Indicate by check mark whether the registrant files or will file annual reports under   cover of Form 20-F or Form 40-F).   Form 20-F X Form 40-F         HSBC Holdings plc Earnings Release 3Q25 28 October 2025     Georges Elhedery, Group CEO, said: "We are becoming a simple, more agile, focused bank, built on our core strengths. 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 positive progress we are making gives us confidence in our ability to upgrade our targets and we now expect 2025 RoTE excluding notable items to be mid-teens, or better. We remain fully focused on helping our customers navigate new economic realities, putting their changing needs at the heart of everything we do."   Financial performance in 3Q25 -       Reported profit before tax of $7.3bn was $1.2bn lower compared with 3Q24 . The reduction reflected an increase in operating expenses, mainly from notable items in 3Q25, including legal provisions of $1.4bn. This was partly offset by revenue growth, which included an increase in banking net interest income ('banking NII') and a strong performance in Wealth, while fee and other income fell in Global Foreign Exchange and in Debt and Equity Markets.  Profit after tax of $5.5bn was $1.2bn lower than in 3Q24. -       Constant currency profit before tax excluding notable items was $9.1bn, an increase of $0.3bn or 3% compared with 3Q24,   as revenue growth, driven by continued strong performance in Wealth, was partly offset by a rise in operating expenses due to planned investment and inflationary impacts. -       Annualised return on average tangible equity ('RoTE') in 3Q25 was 12.3%, compared with 15.5% in 3Q24. Excluding notable items, annualised RoTE in 3Q25 was 16.4%,   a rise of 0.5 percentage points compared with 3Q24. -       Revenue increased by $0.8bn or 5% to $17.8bn compared with 3Q24.   There was growth in fee and other income in Wealth in our International Wealth and Premier Banking ('IWPB') and Hong Kong business segments, supported by higher customer activity, while fee and other income fell in Global Foreign Exchange and in Debt and Equity Markets in our Corporate and Institutional Banking ('CIB') segment, from reduced client activity amid lower market volatility. The increase also reflected growth in banking NII.  Constant currency revenue excluding notable items rose by $0.5bn to $17.9bn. -       Net interest income ('NII') of $8.8bn increased by $1.1bn or 15% compared with 3Q24,   which included a benefit from the non-recurrence of a $0.3bn loss in 3Q24 on the early redemption of legacy securities. The rise also reflected deposit growth and the benefit of our structural hedge, partly offset by a reduction of $0.3bn due to the disposal of our business in Argentina. The fall in interest rates reduced the funding costs of the trading book compared with 3Q24 by $0.7bn, resulting in  an increase in   banking NII of $0.5bn or 4% to $11.0bn. -       Net interest margin ('NIM') of 1.57% increased by 11 basis points ('bps') compared with 3Q24,   including a benefit from the non-recurrence of a loss on the early redemption of legacy securities in 3Q24, partly offset by the disposal of our business in Argentina. NIM increased by 1bps compared with 2Q25, as a rise in NII was partly offset by an increase in average interest-earning assets ('AIEA'). -       Expected credit losses ('ECL') of $1.0bn were stable compared with 3Q24.   The charge in 3Q25 primarily related to stage 3 charges on wholesale exposures, including incremental charges related to the Hong Kong commercial real estate ('CRE') sector, a charge against a Middle Eastern exposure and charges against a small number of exposures in our UK business. This was partly offset by releases due to a stabilisation in the macroeconomic outlook during 3Q25. ECL in 3Q24 included charges against exposures in the onshore Hong Kong CRE and mainland China CRE sectors. -     Operating expenses of $10.1bn were $1.9bn or 24% higher compared with 3Q24.   The increase reflected notable items, including legal provisions of $1.4bn on historical matters, co

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