HSBC maintains dividend as third quarter profit declines 14%

HSBC Holdings PLC on Tuesday left its dividend unchanged as pretax profit declined in the third quarter of 2025, despite the bank reporting robust double-digit net interest and fee income growth.

The Asia-focused, London-based universal bank said pretax profit fell 14% to USD7.30 billion in the three months ended September 30, down from USD8.48 billion a year earlier.

Diluted earnings per share declined 18% to USD0.28 from USD0.34 previously.

The bank left its third quarter dividend unchanged at USD0.10 per share, having completed a previously announced USD3 billion share buyback programme during the three month period.

Net interest income rose 15% to USD8.78 billion from USD7.64 billion, while net fee income grew 12% to USD3.51 billion from USD3.12 billion.

Net operating income increased 4.8% to USD16.78 billion from USD16.01 billion, with total operating expenses excluding amortisation and impairment of intangible assets 20% higher at USD9.12 billion from USD7.60 billion.

HSBC said notable items included approximately USD200 million in restructuring and other related costs associated with its organisational simplification.

"In addition, there was higher planned spend and investment in technology and the impacts of inflation. These increases were partly offset by the impact of the disposal of our business in Argentina and the benefits of our restructuring activities," HSBC explained.

Furthermore, the net interest margin improved to 1.57% from 1.46%, and total assets rose 4.4% to USD3.234 trillion from USD3.099 trillion.

"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 [return on average tangible equity] excluding notable items to be mid-teens, or better," said Chief Executive Officer Georges Elhedery.

At the end of the quarter, the bank's common equity tier one ratio had decreased by 0.1 percentage points to 14.5% when compared to the preceding quarter ended June 30. However, the latest reading continues to align with HSBC's reaffirmed medium-term target range of 14% to 14.5%.