HSBC Holdings PLC (LSE:HSBA) said it will make a $1.1 billion provision in its third quarter 2025 results tomorrow in connection with litigation relating to Ponzi scheme fraudster Bernie Madoff.
The case, filed in 2009 in Luxembourg by Herald Fund SPC, involves claims against HSBC Securities Services Luxembourg (HSSL) for restitution of securities and cash.
On 24 October 2025, the Luxembourg Court of Cassation ruled against HSSL on the securities restitution claim but accepted its appeal on the cash restitution element.
HSSL said it intends to pursue a second appeal before the Luxembourg Court of Appeal.
If unsuccessful, HSSL will contest the amount of restitution in further proceedings.
The provision represents around a 15 basis point impact on HSBC’s CET1 capital ratio and will be classified as a material notable item.
It will not affect the group’s full-year 2025 return on tangible equity excluding notable items or any dividend payments, the lender said.
Madoff was the financier behind one of the biggest scams in global history, swindling clients out of an estimated $17.5 billion over several decades.
Celebrities were among those caught by the scam, with actor Kevin Bacon and director Stephen Spielberg said to have lost substantial sums.
Madoff was imprisoned in 2009 for 150 years after pleading guilty to numerous counts of fraud, but died in prison in 2021 from natural causes.