Overview
- The Luxembourg Court of Cassation rejected HSSL’s appeal on Herald Fund SPC’s securities restitution claim but allowed its appeal on a separate cash claim.
- HSBC Securities Services Luxembourg will take the case to the Court of Appeal and, if unsuccessful, plans to contest any payable amount, with executives cautioning resolution could take months or years.
- Quarterly pretax profit came in at $7.3 billion, down from a year earlier as total legal provisions reached $1.4 billion, including the $1.1 billion charge linked to the Madoff case.
- The provision is estimated to reduce the CET1 ratio by about 15 basis points and is treated as a material notable item that the bank says does not change dividend policy; a quarterly dividend of 10 cents per share was declared.
- HSBC also recorded $300 million of additional legal charges and $1 billion of expected credit losses, including $200 million tied to Hong Kong commercial real estate, while lifting 2025 net interest income guidance to about $43 billion.