However, the bank emphasised its underlying performance, with profits excluding these notable items rising by 3% to $9.1bn (c. £6.8bn), driven by strong growth in its wealth management division.

Several significant charges clouded the headline results. A legal provision of $1.1bn (c. £830 million), primarily related to the historical Bernie Madoff fraud case, was the main driver of a 24% surge in operating expenses to $10.1bn (c. £7.6bn).

The bank also booked a further impairment charge of $1bn (c. £750m), partly linked to its exposure to the Hong Kong commercial real estate sector. Consequently, key performance indicators were affected. The annualised Return on Tangible Equity (ROTE) fell to 12.3% from 15.5% in the same period last year, while the cost-to-income ratio rose to 56.6%. Excluding notable items, the ROTE stood at a healthier 16.4%.

Beneath these charges, HSBC’s core operations and strategic focus on Asian wealth demonstrated strong momentum. The wealth division reported a 30% increase in income to $2.68bn (c. £2bn), contributing to a 5% rise in group revenues to $17.8bn (c. £13.4bn). Net interest income (NII) saw a robust 15% increase to $8.8bn (c. £6.6bn), with the net interest margin (NIM) improving by 11 basis points to 1.57%. The bank’s capital cushion remained stable, with a common equity tier 1 (CET1) ratio of 14.5%.

The results were accompanied by the significant announcement of a planned $13.6bn (£10.2bn) acquisition to take full ownership of its subsidiary, Hang Seng Bank. To help finance the deal, HSBC has suspended its share buyback programme for at least three quarters. This move prompted an initial dip in the share price, although the bank confirmed its dividend policy, which offers a current yield of 4.9%, remains unchanged.

Looking ahead, HSBC provided an upgraded forecast, now expecting full-year Net Interest Income of at least $43bn (c. £32.3bn), up from a previous estimate of $42bn (c. £31.6bn). The bank also reiterated its confidence in delivering a ROTE in the mid-teen percentages for both 2025 and 2026, excluding notable items.