HSBC Holdings PLC (LSE:HSBA) reported strong growth in revenue and profit in the third quarter alongside plans for a new $3 billion share buy-back.
The Asia-focused bank said pre-tax profit in the quarter ended 30 September 2023 rose by US$4.5 billion to US$7.7 billion, reflecting the positive impact of higher interest rates and the US$2.1 billion reversal of an impairment relating to the sale of its French business.
Revenue increased 40% to US$16.2billion, as the higher interest rate environment supported growth in net interest income in all of global businesses, and non-interest income increased.
Noel Quinn, group chief executive, said: "We have had three consecutive quarters of strong financial performance and are on track to achieve our mid-teens return on tangible equity target for 2023."
HSBC declared a third interim dividend of US$0.10 per share and intends to make a further share buy-back of up to US$3 billion, which is expected to be completed by its 2023 full-year results in February.
Net interest margin of 1.70% increased by 19 basis points compared with a year ago, and decreased by 2bps compared with the previous quarter, notably reflecting an increase in customers migrating their deposits to term products, particularly in Asia.
Bad debt charges of US$1.1 billion were broadly in line with last year while operating expenses of US$8.0 billion were 2% higher than last year.
Customer lending balances decreased by US$24 billion compared with last year while customer accounts fell by US$33 billion compared with a year ago.
The group’s common equity tier 1 capital ratio of 14.9% rose 0.2 percentage points compared with a last year.
The bank said it continues to target a return on average tangible equity in the mid-teens for 2023 and 2024, and sees net interest income in 2023 to be above US$35 billion.