HSBC (NYSE:HSBC) Releases Earnings Results, Misses Expectations By $0.10 EPS

Key Points

• HSBC missed quarterly expectations: EPS was $2.10 versus the $2.20 consensus, while revenue of $18.68 billion also fell short of estimates. Shares declined 6.8% following the report.
• Underlying performance remained solid: Revenue increased 5% and profit before tax rose 10% excluding notable items, while HSBC maintained its guidance and announced up to $1 billion in additional share buybacks.
• Margin and revenue risks persist: Customers are shifting deposits into higher-rate products, increasing funding costs, and planned business disposals are expected to reduce cumulative revenue by about $2.2 billion through 2028.

HSBC (NYSE:HSBC - Get Free Report) posted its quarterly earnings data on Tuesday. The financial services provider reported $2.10 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $2.20 by ($0.10), FiscalAI reports. The business had revenue of $18.68 billion during the quarter, compared to the consensus estimate of $18.98 billion. HSBC had a net margin of 18.19% and a return on equity of 13.80%.

Here are the key takeaways from HSBC's conference call:

• Strong, broad-based quarter: Revenue rose 5% to $18.7 billion and profit before tax increased 10% to $10 billion, excluding notable items. HSBC maintained its full-year guidance, with year-to-date return on tangible equity at 18.8%.
• Capital supports further shareholder returns: HSBC announced an additional share buyback of up to $1 billion, supported by a 13.9% CET1 ratio and an estimated 40–50 basis-point CET1 benefit from Basel 3.1 adoption in 2027.
• Cost discipline remains on track: The bank delivered $0.2 billion of simplification savings in the quarter, bringing cumulative savings to $1.9 billion of its $2 billion target, while target-basis cost growth was held to 1% year over year.
• Deposit mix is creating margin pressure: Hong Kong customers continued shifting from low-cost CASA balances into time deposits, while U.K. deposit competition also intensified. Management said deposit growth remains NII-positive and reiterated banking NII guidance of at least $46 billion.
• Strategic disposals will weigh on future revenue: HSBC expects cumulative revenue attrition of about $2.2 billion through 2028 from business disposals, including Australia retail banking and life-insurance transactions, although it expects redeployed costs to generate new growth over time.

HSBC Stock Down 6.8%

HSBC stock opened at $85.04 on Tuesday. HSBC has a 1-year low of $67.56 and a 1-year high of $107.92. The firm has a market capitalization of $291.56 billion, a price-to-earnings ratio of 12.06, a price-to-earnings-growth ratio of 0.88 and a beta of 0.58. The company has a current ratio of 0.85, a quick ratio of 0.92 and a debt-to-equity ratio of 0.67. The firm's fifty day moving average price is $100.05 and its two-hundred day moving average price is $93.17.

HSBC Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Friday, September 25th. Shareholders of record on Friday, August 14th were issued a dividend of $0.50 per share. The ex-dividend date was Friday, August 14th. This represents a $2.00 annualized dividend and a yield of 2.4%. HSBC's dividend payout ratio is presently 28.09%.

HSBC News Summary

Here are the key news stories impacting HSBC this week:

• Positive Sentiment: Third-quarter profit before tax rose 32% year over year to $9.6 billion, supported by higher net interest income, lower expected credit losses and cost reductions. HSBC also announced a share buyback of up to $1 billion. HSBC's third-quarter profit jumps 32%, in line with estimates
• Positive Sentiment: The bank declared a third interim dividend of $0.10 per share, representing a $1.71 billion payout and reinforcing its capital-return plans. HSBC declares USD 1.71bn third interim dividend
• Neutral Sentiment: HSBC’s earnings presentation highlighted its simplification and cost-cutting strategy, while the bank continues to refine client segmentation and consider combining Hang Seng’s investment arm with HSBC’s asset-management business. These actions could improve efficiency but offer limited immediate earnings relief. HSBC Holdings plc 2026 Q3 Results Earnings Call Presentation
• Negative Sentiment: Revenue of approximately $18.6 billion came in below the $18.98 billion consensus estimate, while reported EPS of $2.10 missed expectations of $2.20. The revenue shortfall outweighed the 32% profit increase for investors. HSBC quarterly earnings report
• Negative Sentiment: Customers are moving cash into higher-rate products, increasing HSBC’s funding costs and threatening net-interest margins. Slower wealth-management growth also added to concerns about future revenue momentum. Customers are chasing higher-rate products
• Negative Sentiment: Investors are also weighing the possibility of higher UK bank taxes, while broader weakness in European banking stocks amplified the negative reaction. Higher bank tax expected in budget

Analyst Ratings Changes

Several research firms have recently issued reports on HSBC. BNP Paribas Exane lowered HSBC from a "hold" rating to a "strong sell" rating and reduced their target price for the stock from $100.50 to $97.00 in a report on Tuesday, August 4th. Erste Group Bank downgraded shares of HSBC from a "buy" rating to a "hold" rating in a report on Wednesday, July 15th. Weiss Ratings reiterated a "hold (c)" rating on shares of HSBC in a report on Monday, August 3rd. Wall Street Zen raised HSBC from a "hold" rating to a "buy" rating in a report on Saturday, August 29th. Finally, The Goldman Sachs Group reiterated a "buy" rating on shares of HSBC in a research report on Wednesday, August 5th. Three equities research analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, HSBC currently has a consensus rating of "Hold" and a consensus price target of $97.00.

About HSBC

HSBC Holdings plc is a global banking and financial services company headquartered in London. Its principal subsidiary, The Hongkong and Shanghai Banking Corporation, was established in 1865 to facilitate trade between Europe and Asia. HSBC's shares trade on the New York Stock Exchange in the form of American depositary receipts under the symbol HSBC.

The company provides personal and wealth banking, commercial banking, corporate and institutional banking, investment banking, global markets, and asset management services.

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