HSBC's 3rd-quarter profit dips amid falling interest rates, property slump, Madoff suit

Core Insights - HSBC Holdings reported a third-quarter net profit of US$4.58 billion, a 25% decline compared to the previous year, missing analysts' expectations of US$5.38 billion [2] - The bank's pre-tax profit fell 14% year-on-year to US$7.3 billion, also below the expected US$7.66 billion [3] - Revenue increased by 5% to US$17.8 billion, primarily driven by higher fee income in wealth and insurance sectors [3] Financial Performance - The net profit for the quarter ending in September was US$4.58 billion, or 28 US cents per share [2] - A one-off provision of US$1.1 billion was set aside to settle a lawsuit related to Bernie Madoff's fraud [2] - HSBC recorded US$1 billion in expected credit losses, consistent with the previous year, including US$200 million related to the commercial real estate market in Hong Kong [6] Strategic Outlook - CEO Georges Elhedery emphasized the bank's transformation into a "simple, more agile, focused bank" during its 160th anniversary in Hong Kong [4] - The bank anticipates a return on tangible equity, excluding notable items, to be in the mid-teens or better by 2025 [5] - A third-quarter dividend of 10 US cents per share was announced, leading to a 3% increase in stock price to HK$105.20 [5]