HSBC Q3 Profit Rises 32% to $9.6 Billion as Indian Deposits and Hong Kong Lift the Bank

HONG KONG, October 27: HSBC Holdings reported a 32% rise in third-quarter pre-tax profit to $9.6 billion on Tuesday, helped by the absence of last year’s large legal provisions, and announced a further share buyback of up to $1 billion. The Asia-focused lender said Indian deposits raised under the Reserve Bank of India’s special FCNR(B) swap window helped lift customer accounts in its wealth business, while Hong Kong remained its largest profit centre outside corporate banking. Its shares fell nearly 6% in Hong Kong trading as revenue came in below some market expectations.

Key highlights

• Pre-tax profit rose $2.3 billion to $9.6 billion; excluding notable items it was $10.0 billion, up 10% at constant currency.
• Revenue rose $0.8 billion to $18.6 billion; net interest income rose 6% to $9.3 billion, with a stable net interest margin of 1.57%.
• Return on tangible equity was 17.7%, against 12.3% a year earlier.
• A new buyback of up to $1 billion and a third interim dividend of $0.10 a share.
• The CET1 capital ratio slipped to 13.9%; HSBC expects final Basel 3.1 rules to add 40–50 basis points on January 1, 2027.
• Customer accounts in International Wealth and Premier Banking rose $9.8 billion in the quarter, mainly from Indian FCNR deposits.

The quarter in numbers

Group Chief Executive Georges Elhedery said clients “continue to turn to us to navigate uncertainty and seize new opportunities”, and that simplifying the bank was creating capacity to invest, grow and return capital to shareholders. For the first nine months, pre-tax profit rose 26% to $29.2 billion on revenue of $56.4 billion, up 9%.

Hong Kong and the businesses

Hong Kong deposits kept growing and lending rose. Charges on Hong Kong commercial real estate were $0.3 billion for the first nine months, down from $0.7 billion a year earlier. HSBC completed the privatisation of Hang Seng Bank on January 26 and expects $0.5 billion of annual pre-tax savings by the end of 2028, against $0.6 billion of restructuring costs. Wealth clients brought in $105 billion of net new money in the first nine months, of which $95 billion was booked in Asia.

The India angle: FCNR(B) deposits

The Reserve Bank of India opened a special dollar–rupee swap facility on June 8 for banks raising foreign-currency non-resident (FCNR(B)) deposits, external commercial borrowings and overseas borrowings. The FCNR(B) window closed on August 31, a month early, after the scheme had met its objective. The RBI said $132.98 billion of FCNR(B) deposits were mobilised through the window; with borrowings, total inflows reached $143.60 billion by September 18.

HSBC said its wealth and premier banking customer accounts rose $9.8 billion at constant currency from the end of June, mainly from Indian deposits linked to the scheme, which also lifted its risk-weighted assets through sovereign exposures. That rise in risk-weighted assets, lower values on some debt instruments and the completed buyback pulled the CET1 ratio down 0.2 percentage point.

Our calculation

• Underlying growth: of the $2.3 billion rise in pre-tax profit, $1.4 billion came from the non-recurrence of 2025 legal provisions; the underlying gain was about $0.9 billion.
• Cost-efficiency: operating costs were about 47% of revenue in the quarter ($8.8bn ÷ $18.6bn), against about 57% a year earlier.
• NII guidance: banking NII was $34.6 billion in nine months; reaching at least $46 billion for the year needs about $11.4 billion in the fourth quarter, slightly below the third quarter’s $11.7 billion.
• Capital: adding 40–50 basis points from Basel 3.1 to today’s 13.9% gives a pro forma 14.3–14.4%, inside HSBC’s 14–14.5% target range.
• India’s share: even if all of the $9.8 billion came from the scheme, it would equal about 7% of the $132.98 billion raised — an upper-bound estimate.
• Asia’s wealth pull: $95 billion of $105 billion in net new money, about 90%, was booked in Asia.

What it means

HSBC’s results show how far the bank now depends on Asia: Hong Kong is its biggest single market, most of its new wealth money arrives in Asia, and India’s deposit drive gave it a one-off boost to balances this quarter. The share-price fall suggests investors had hoped for stronger revenue growth, the harder number for the bank to lift. The FCNR(B) inflows also show how the RBI’s swap window drew global banks into India’s effort to strengthen its foreign-exchange buffers.

What to watch

• Whether fourth-quarter banking NII keeps pace with the $46 billion target.
• The new $1 billion buyback, expected to be completed by the 2026 full-year results.
• Credit losses, which HSBC expects at about 45 basis points of average loans in 2026, including allowances for the conflict in the Middle East.
• Basel 3.1 implementation on January 1, 2027, and the exits from Australian retail banking and Malta.

File photo: the HSBC Main Building in Central, Hong Kong, August 2017. Image: Suicasmo, CC BY-SA 4.0, via Wikimedia Commons. Photo source · Licence

Sources

• HSBC: HSBC Holdings plc 3Q 2026 Earnings Release (media release)
• HSBC: 3Q 2026 quick read
• HSBC: Earnings Release 3Q 2026 (PDF)
• Reserve Bank of India: Data on forex inflows via FCNR(B) deposits, ECBs and OFCBs under the swap facility (September 21, 2026)
• Press Information Bureau: RBI’s USD-INR swap facility sparks forex inflows (August 24, 2026)

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