HSBC Holdings has announced a substantial increase in performance-related pay, setting aside an extra $300 million for this purpose. The bank reported a nearly three-fold rise in third-quarter profit, with CFO Georges Elhedery acknowledging the bank’s reshaping, strong balance sheet, and growth in wealth and transaction banking as contributing factors.
Increased Investment in Technology and Operations
In addition to the boost in performance-related pay, HSBC is also planning to allocate approximately 1% more towards technology and operations expenditure compared to previous estimates. This investment emphasizes the importance of enhancing the bank’s technological capabilities.
Impressive Third-Quarter Results
HSBC’s reported third-quarter profit soared to $6.27 billion from $2.66 billion, as revenue experienced a 40% surge to $16.16 billion. It is worth noting that the bank benefited from a favorable comparison to the previous year when it faced a $2.5 billion impairment on its French retail banking operations. Moreover, the impact of interest rate rises in its payments, global banking and markets, and personal banking divisions positively influenced the overall revenue.
Financial Outlook and Stock Buyback
Looking ahead, HSBC anticipates reinstating the impairment in the fourth quarter. Expected credit losses remained stable at $1.07 billion. Additionally, the bank revealed plans for a $3 billion stock buyback program, demonstrating confidence in its financial position and future growth potential.
Despite these positive developments, HSBC’s stock experienced a slight decline of 0.4% in U.K. trade. Nevertheless, it has enjoyed a 16% gain throughout the year.