3Q 2018 update

The 3Q 2018 Earnings Release, investor presentation and data pack are available to download.

At a glance

Our international network, access to high-growth markets, and balance sheet strength deliver long-term value for customers and shareholders.

Our operating model consists of four global businesses and a Corporate Centre, supported by HSBC Operations Services and Technology, and 11 global functions.

Fact: Reported profit before tax is 5.9 billion US dollars in 2018. Reported profit before tax as of the third quarter of 2017 is 4.6 billion US dollars.
Fact: Adjusted profit before tax is 6.2 billion US dollars in 2018. Adjusted profit before tax as of the third quarter of 2017 is 5.3 billion US dollars.
Fact: Adjusted revenue is 13.8 billion US dollars in 2018. Adjusted revenue as of the third quarter of 2017 is 12.7 billion US dollars.
Fact: Common equity tier 1 ratio in 2018 is 14.3 per cent. Common equity tier 1 ratio as of 30 June 2018 is 14.2 per cent.

Key highlights

  • Progress on the plan we set out in our June 2018 strategy update to get HSBC growing again and deliver value for shareholders
  • Group adjusted revenue up 9% on 3Q17, driven by strong performances and revenue growth in our three main global businesses
  • Reported profit before tax up 28% compared with 3Q17; adjusted profit before tax rose 16%
  • Adjusted operating expenses of US$7.7bn up 2% on 3Q17, reflecting investment in growth and technology
  • Strong capital base with a common equity tier 1 ratio of 14.3%

Group Chief Executive

“These are encouraging results that demonstrate the revenue potential of HSBC. We are doing what we said we would – delivering growth from areas of strength, and investing in the business while keeping a strong grip on costs. We remain committed to growing profits, generating value for shareholders and improving the service we offer our customers around the world.”

John Flint, HSBC Group Chief Executive
29 October 2018

Financial targets

Return on average tangible equity (% annualised)

Our target is to achieve a reported return on tangible equity (RoTE) of more than 11% by the end of 2020 – broadly equivalent to a return on equity (RoE) of 10%. Throughout the period from 2018 to 2020, our plan assumes our common equity tier one (CET1) ratio will be above 14%.

Adjusted jaws for 9M18

Our target is to maintain positive adjusted jaws on an annual basis. Positive jaws occurs when the figure for the percentage change in revenue is higher than, or less negative than, the corresponding rate for operating expenses.

We are on track to deliver positive adjusted jaws for the full year, based on our current operating trends, while noting the sensitivity of the impact on adjusted jaws of any differences between actual and currently expected revenue and cost growth during the final quarter of the year. We remain committed to the discipline of delivering positive jaws.

Dividends per ordinary share in respect of period

We plan to sustain the annual dividend in respect of the year at its current level for the foreseeable future. Growing our dividend in the future will depend on the overall profitability of the Group, delivering further release of less efficiently deployed capital and meeting regulatory capital requirements in a timely manner.

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