HSBC's third-quarter profit drops 14%, but beats expectations on higher revenue, interest income

Core Insights - HSBC reported a profit before tax of $7.3 billion for the third quarter, exceeding expectations despite a nearly 14% decline from the previous year due to increased operating expenses [2][5] - The bank's revenue reached $17.8 billion, surpassing the consensus estimate of $17.05 billion, driven by growth in net interest income and a strong performance in its wealth management segment [1][5] Financial Performance - Profit before tax: $7.3 billion compared to $5.98 billion in the same quarter last year [5] - Revenue: $17.8 billion versus $17.05 billion, indicating a positive revenue growth trajectory [5] Legal Provisions - HSBC recognized a provision of $1.1 billion in its third-quarter results due to a court ruling related to the Bernard Madoff investment fraud case, impacting its financials [3][4] - The provision will reduce the bank's Common Equity Tier 1 (CET1) capital ratio by approximately 15 basis points, a critical measure of financial strength [4] Future Actions - HSBC plans to appeal the court's decision regarding the Madoff case and will contest the final amount in subsequent proceedings if necessary [4]