HSBC launches $1bn share buyback as profits boom with higher rates

HSBC plans to integrate Hang Seng Bank's asset management unit, which manages $50bn, into its own $876bn fund business, according to Reuters. HSBC aims to create a larger asset management business in Hong Kong. The move follows HSBC's $13.6bn take-private deal for Hang Seng Bank, completed in January. HSBC also plans to cut roles in its UK wealth management business as part of an AI-driven strategy.

HSBC maintained its full-year net interest income outlook of at least $46 billion, citing higher interest rates as positive. The bank reported increased competition for deposits, with time deposits accounting for 38% of the mix in Hong Kong. Corporate and Institutional Banking was the top revenue contributor, with wholesale transaction banking revenue up 12% year over year.

HSBC's CFO, Pam Kaur, stated the bank has no plans to move its headquarters from the UK despite potential tax increases. HSBC reported a 32% rise in Q3 profits to $9.6bn and plans to return $2.7bn to shareholders. The bank's shares fell nearly 6% on Tuesday. HSBC's net interest income rose to $9.3bn, driven by hedging strategies and deposit growth in Hong Kong.

HSBC reported weaker-than-expected revenue, causing its shares to drop 7% and dragging down European banking stocks. The STOXX 600 fell 0.2%, with the banking sub-index down 1.3%. Investors await US tech earnings, focusing on AI spending and profitability. Central bank decisions and geopolitical tensions also influence market sentiment.

HSBC shares dropped 7% after reporting Q3 net interest income 2% below expectations. Customers are shifting to higher-rate products, with 38% of deposits in time deposits in Hong Kong, near its 40% historical peak, according to the bank.

HSBC's shares fell 6% after Q3 revenue missed estimates at $18.6B vs. $19B forecast, despite a 32% pretax profit rise to $9.6B. Wealth division revenue stagnated, and analysts cited deposit competition and margin pressures. HSBC launched a $1B share buyback. The bank faces scrutiny amid slowing wealth growth and market expectations for performance upgrades.