$HSBC Tosses Shareholders $1B in ‘Hush Money’ After Missing Q3 Estimates (Thanks, Bernie)

“Stormy Daniels” but make it British… 

Ah yes, the classic “grow your profits by not getting sued” move. On Tuesday, Europe’s largest bank said its Q3 pretax profit jumped 32% from a year ago to $9.63B, which, nice. It’s just that analysts wanted $9.69B. Revenue climbed to $18.6B, but whiffed on the $18.93B estimate.

So where’d the 32% come from? Mostly from stuff that didn’t happen. Literally. A year ago, HSBC booked $1.4B in f*ckery legal provisions, $1.1B of it after losing a Luxembourg court fight tied to Bernie Madoff’s Ponzi scheme. Same deal with costs. Operating expenses “fell” 12% to $8.8B. Strip out last year’s legal tab, though, and costs actually went up on inflation and tech spending. Net interest income rose 6% to $9.3B, and lower credit losses did some heavy lifting, too.

Friendly reminder, HSBC is about as subtle at committing crimes as Ricky LaFleur. Back in 2012, HSBC paid $1.9B after letting Mexican drug cartels move at least $881M through its accounts. And yet, it’s still standing (RIP, Credit Suisse).

Naturally, after missing on the top and bottom line, HSBC made it rain on shareholders with a buyback of up to $1B by year-end, plus a 10-cent dividend. For context, its last buyback program was $3B, before HSBC hit pause to spend ~$14B taking Hang Seng Bank private.

Investors didn’t buy it. HSBC shares fell 2.95% in Hong Kong after the release. Wooof. 

As for what’s next, HSBC stuck to its 2026 target of at least $46B in banking net interest income, plus a return on tangible equity (read: how much profit it squeezes out of shareholders’ money) of 17% or better through 2028. Same, same, but same.

Of course, it ain’t all dinners at Dorsia and fat bonus checks for everyone at HSBC. Per the FT, the bank is gutting its UK wealth management business as part of a big AI push. Snitches familiar with the plan say that means cutting half the management and specialist roles and ~70% of its financial advisers. One source called the cuts “deep, wide and brutal” (ayy). HSBC says it’s evolving to deliver “more digitally enabled products and journeys.” CEO Georges “Generative AI Will Destroy Certain Jobs” Elhedery did warn everyone back in May.

In other words, the bank that couldn’t tell a cartel from a customer is about to let a chatbot manage rich people’s money. Godspeed, rich people…

Until next time, friends! 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.