HSBC Profits More Than Double to $7.7bn Boosted by Higher Interest Rates, Announces $3bn Share Buyback, Despite Risks in Chinese Real Estate Sector

HSBC's profit misses estimates due to increased technology costs and a $500 million provision for potential real estate loan defaults in China; warns of "potential for further deterioration" and a likely increase in costs by 4% for the year.

HSBC's Q3 profits more than doubled to $7.7bn, boosted by higher interest rates, however, it fell below analyst expectations of $8.1bn due to a $500m provision for potentially defaulting real estate loans in China and increased technology costs.
Despite risks in the Chinese real estate sector, HSBC announced a $3bn share buyback, taking their total buybacks for the year to $7bn and a dividend payout to 30 cents per share.
HSBC contends with a 4% expected increase in costs for the year, from technology and operating spending and potentially increased staff bonuses in Q4.
The bank's slight reduction in net interest margin - a key measure of loan profitability - reflects customers moving their deposits to term products, particularly in Asia, narrowing their profit margins.
The bank is closely monitoring risks associated with its exposure to China's commercial real estate sector, indicating potential for 'further deterioration in credit conditions' despite seeing some signs of bottoming out in the market.

South China Morning Post

CNBC

South China Morning Post