London, 27 October 2026 — EBM Newsdesk Analysis — By Anthony Gill
HSBC delivered a big jump in profits, and its shares still fell sharply. Pre-tax profit for the third quarter rose 32% to $9.6bn, in line with expectations. But revenue of $18.6bn, up 5%, fell short of analysts’ forecasts of about $19bn, according to Reuters. The Hong Kong-listed shares fell about 6%.
The Wealth Engine Stalls
The biggest disappointment was wealth management, the business chief executive Georges Elhedery has made central to HSBC’s strategy. Wealth revenue was flat at $2.7bn, after growth of 15% and 23% in the first two quarters. For a bank betting its future on managing the money of Asia’s growing middle class and rich, that is an unwelcome pause.
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SubscribeThe profit jump came mainly from favourable interest rates and lower bad debts. Expected credit losses fell 17% to $800m, helped by smaller charges on Hong Kong commercial property. The year-earlier quarter had also carried large legal provisions that did not recur, AP reported.
HSBC launched a new share buyback of up to $1bn, the same as last quarter, kept its dividend at $0.10 a share, and said it remained on track to hit its profitability targets through 2028. Investors had hoped for more. “There is sometimes a market expectation that we upgrade guidance or targets,” finance director Pam Kaur said.
A Bank in Transition
HSBC is midway through a major overhaul. Elhedery has cut layers of management, including its biggest senior banker cull since the financial crisis, and is using AI to shrink back-office costs, part of a wider trend that has seen Barclays cut 5,000 jobs. As EBM has reported, the AI layoffs have arrived across European banking.
Digital rivals are also adding pressure. Revolut, valued at $115bn, is chasing the same wealthy, internationally mobile customers HSBC wants to win.
Budget Risk
There is a political shadow too. Campaigners are pressing the Chancellor to raise taxes on banks in Wednesday’s Budget, arguing that lenders have profited from higher interest rates. With inflation at 3.5% and the public finances stretched, a windfall-style levy cannot be ruled out.
The Call
HSBC’s results were good, just not good enough. A 32% profit rise driven by interest rates and lower bad debts is welcome, but investors want proof that the bank can grow without relying on rates. The stalling wealth business undermines that story. With rate cuts eventually on the horizon and the threat of a bank tax in Wednesday’s Budget, HSBC needs its wealth engine running again quickly. Until it is, the shares will struggle to rerate however big the buybacks are.
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