HSBC’s Revenue Miss Pulled The FTSE 100 Lower

HSBC launched RedCoin, a stablecoin integrated into its PayMe app, which has 3.3 million users and 100,000 merchants. S&P Global Ratings expects this to drive stablecoin adoption, with RedCoin also planned for HSBC's mobile banking app and tokenised investments. Hong Kong's stablecoin bill, passed in 2025, is expected to enhance transparency and compliance.

The FTSE 100 fell 0.8% on Tuesday, led by declines in HSBC and Reckitt Benckiser. HSBC missed Q3 net interest income expectations, while Reckitt lowered annual revenue guidance. Investors await Wednesday's UK Budget and US Fed rate decision. The FTSE 250 rose 0.9%, with Vistry gaining 8.2% on a new CFO hire. Shoe Zone dropped 8.8% due to expected losses.

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.