HSBC profits surge 10%, announces $3B buyback

HSBC reported strong third-quarter results with profits rising 10% to $8.5 billion, significantly exceeding market expectations. The banking giant's revenue grew 5% to $17 billion in the quarter ending September, driven by slower-than-expected rate cuts and increased revenue from wealth and wholesale banking operations.

The announcement sparked investor enthusiasm, sending HSBC shares to a six-year high in London with a 4% increase. The bank also announced a new $3 billion share buyback program, which contributed to earlier gains in its Hong Kong-listed shares.

Meanwhile, Standard Chartered also reported impressive quarterly results, with pretax profits reaching $1.72 billion, more than doubling from the previous year's $633 million and exceeding analyst forecasts of $1.49 billion. The bank upgraded its income growth forecast for the year to 10% from the previous 7% and announced plans to return at least $8 billion to shareholders over 2024-2026.

Both banks are undergoing significant restructuring efforts. HSBC recently announced plans to merge certain operations and reorganize its geographic structure into East and West divisions, though CEO Georges Elhedery emphasized this doesn't signal an eventual business split. Standard Chartered is doubling down on its wealth management business, planning to invest $1.5 billion over five years while reducing its mass retail banking operations.

Standard Chartered's wealth solutions unit showed particularly strong performance, with income jumping 32% to $694 million. The bank's shares in London have outperformed HSBC this year, rising 31% compared to HSBC's 15% increase.

However, HSBC remained reserved about specific details regarding cost savings from its structural overhaul and potential senior role reductions, leaving investors awaiting further clarification on these strategic changes.