HSBC profits jump 32% as calls grow for higher bank taxes
HSBC reported a third-quarter profit surge and $2.7bn shareholder payout ahead of the UK budget.
At a glance
- HSBC third-quarter profits rose 32% to $9.6bn, slightly below analyst estimates.
- The bank will return $2.7bn to shareholders through a $1bn buyback and dividend.
- Unions and economists are urging the UK government to raise bank taxes in the budget.
HSBC has reported a 32% surge in third-quarter profits to $9.6bn, the London-headquartered bank said ahead of the UK budget. The results, covering July to September, came slightly below consensus estimates and prompted the bank to announce a $2.7bn shareholder payout.
The distribution includes a $1bn share buyback and an interim dividend of $0.1 per share worth $1.71bn. Net interest income, the gap between loan charges and savings payments, rose to $9.3bn from $8.8bn a year earlier, supported by hedging and deposit growth in Hong Kong while UK deposits remained flat.
HSBC follows Barclays, which reported a 12% profit increase last week. The TUC said Britain's big four banks have earned more than £200bn over the past five years, arguing the sector can afford higher taxes.
With John Healey finalising tomorrow's budget, unions and think tanks are pressing for a higher bank surcharge. The TUC said raising it to 16% would yield £24bn over four years, while a 35% rate would bring in £60bn. The New Economics Foundation said restoring the surcharge to 8% would raise about £1.8bn annually.
NEF economist Abhijay Sood noted that households face rising mortgage costs and called for stronger action. HSBC CFO Pam Kaur said the bank was encouraged by the government's growth agenda but declined to comment on speculation about job losses. Group CEO Georges Elhedery said clients continue to turn to HSBC to navigate uncertainty.
The bank was also asked about artificial intelligence and potential job cuts after rival Barclays announced 5,000 redundancies last week. HSBC declined to comment on press speculation regarding job losses in its UK wealth management business.
Source: The Guardian Business.
Questions and answers
- How much did HSBC profits rise?
- HSBC reported a 32% increase in profits to $9.6bn for the July to September quarter.
- How much is HSBC paying shareholders?
- The bank is distributing $2.7bn, including a $1bn share buyback and a $0.1 per share interim dividend.
- What bank tax changes are being proposed?
- The TUC wants a higher bank surcharge, saying 16% would raise £24bn over four years and 35% would raise £60bn.
