The Guardian·2025-10-28 11:37Core Viewpoint - HSBC has indicated that it may take years to resolve a lawsuit related to the Bernard Madoff Ponzi scheme, which has significantly impacted the bank's profits, leading to a 14% decline in pre-tax profits for the third quarter of 2023 [1][4]. Financial Impact - HSBC's pre-tax profits fell to $7.3 billion for the three months ending September 30, down from $8.5 billion in the same period last year, primarily due to a $1.1 billion provision for the Madoff lawsuit [4]. - The bank's operating costs increased by 24% to $10 billion, influenced by the Madoff provision and restructuring costs related to layoffs [4]. - Despite these challenges, HSBC reported a 15% rise in net interest income to $8.8 billion and a 12% increase in net fee income to $3.5 billion [6]. Legal Proceedings - HSBC has set aside a $1.1 billion provision to address the lawsuit from investors affected by the Madoff scheme, which is the largest Ponzi scheme in history, involving approximately $65 billion in fraud [2][3]. - The bank's CFO, Pam Kaur, stated that the timeline for a settlement is uncertain, potentially taking months or even years, and emphasized that the $1.1 billion figure is based on careful judgment and legal advice [3]. - HSBC plans to appeal a court decision regarding its Luxembourg arm and may dispute the final amount in future proceedings if necessary [3]. Strategic Focus - HSBC's CEO, Georges Elhedery, highlighted the bank's commitment to becoming a more agile and focused institution, aiming to address customer needs amid changing economic conditions [7].