HSBC Q3 numbers beat expectations and loans advance despite rising interest rates

Revenue growth across all areas of the global business drive positive set of results.

Article updated: 29 October 2018 9:00am Author: Helal Miah

  • Shares in HSBC open 5% higher as Q3 numbers provide pleasant reading.
  • Company reported strong revenue growth across all of its global business with Asian business performing particularly well.
  • We recommend HSBC as a ‘buy’ for income seeking investors.

Third quarter results from HSBC this morning seems pleasant reading as the group reported profit before tax of $5.9bn which was 28% higher than in the same period the previous year. This reflected strong revenue growth and lower operating costs, while loans and advances to customers increased by $8bn reflecting confident customers.

The bank also reported a good set of numbers for the first nine months as a whole which reflected revenue growth across all of its global businesses. Its Asian business did particularly well as the growth in customer deposits helped widen margins. Investors should appreciate that the company’s capital base also remains strong with a common equity ties 1 ratio on 14.3%. Overall the numbers were comfortably ahead of expectations resulting in the shares to open up higher by roughly 5% in early morning trading.

The new senior management team are trying to steer the bank to growth once again and their comments so far are fairly positive. HSBC will focus on driving further revenue growth from Asia while also expanding its wealth management and insurance business. While there was good news on cost controls this quarter, this is something HSBC have generally struggled with lately and such will remain a key strategic focus.

With dollar interest rates rising and wobbles in the global stock markets, investors should naturally be cautious. However, these results combined with management commentary do not reflect this. We believe that investors in this type of company, as in those looking for income at a relatively low to medium level of risk, should look past these short term wobbles and stay invested in solid income paying stocks for the long term. We therefore continue with our ‘buy’ recommendation on HSBC.


All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Helal Miah portrait photo
Helal Miah

Investment Research Analyst

Helal has spent time as an independent proprietary trader, trading the US equity futures market. He has also helped manage private client, institutional, retail and hedge funds. His qualifications include the Securities Institute Diploma and the Investment Management Certificate.