In the three months ended September, HSBC's profit after tax surged by 235%, amounting to $6.26 billion, in comparison to the $2.66 billion seen in the corresponding period last year. Profit before tax expanded to $7.7 billion, primarily due to an increase in the interest rate environment. Additionally, revenue increased to $7.71 billion, in comparison to the $3.23 billion from the year prior.
HSBC's profit after tax in the three months ended September came in at $6.26 billion, a 235% increase from the same period a year prior when it was $2.66 billion. Despite exceeding expectations of economists who forecasted a profit of $6.42 billion, the bank's larger than anticipated impairment of $2.3 billion in the third quarter of 2022 due to a potential sale of its French operations resulted in the miss. This led to $2.1 billion of the impairment being reversed in the first quarter of 2023 as the sale became less certain. Revenue meanwhile grew to $7.71 billion for the quarter, up from $3.23 billion the year prior, driven by an improved interest rate environment which also increased net interest margin to 1.7%, rising 19 basis points year-on-year and above estimates of 1.68%. Profit after tax for the nine months ended September was $24.33 billion, compared to $11.59 billion in the same period the year before.
HSBC's Hong Kong-listed shares jumped 0.43% following the release of their results. This prompted the board to authorize a third interim dividend of 10 cents per share. To further reward shareholders, the bank declared it would begin a $3 billion buyback shortly and complete it by February 21, 2024. Group CEO Noel Quinn remarked: "We're delighted to give back to our shareholders. This year, we've announced buybacks totaling up to $7 billion and three quarterly dividends amounting to $0.30 per share, demonstrating our capacity to continually fund growth."
The buyback is estimated to have a 0.4% effect on their common equity tier 1 capital ratio. This metric is used to assess the stability of European banks. HSBC intends to bring down its CET1 ratio to a range of 14-14.5%, decreasing from the current level of 14.9%. Additionally, the bank specified their dividend payout ratio at 50% for 2023-2024, not accounting for material remarkable items.
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