HSBC Holdings PLC on Tuesday heralded strong cash generation and revenue growth as third-quarter results beat expectations.

The Asia-focused lender said pretax profit rose 9.9% to $8.48 billion in the third quarter from $7.71 billion a year before. Pretax profit beat consensus of $7.60 billion.

Revenue improved 5.2% to $17.00 billion from $16.16 billion.

HSBC said profit growth primarily reflected revenue growth in Wealth & Personal Banking, and in foreign exchange, equities and global debt markets in Global Banking & Markets.

Chief Executive Georges Elhedery said: ‘We delivered another good quarter, which shows that our strategy is working. There was strong revenue growth and good performances in Wealth and Wholesale Transaction Banking.’

Reflecting ‘strong organic capital generation’, Elhedery said HSBC intends to start a new $3 billion share buyback, after wrapping up one of the same size last week. It plans to complete this new buyback by the time it announces annual results for 2024, which is expected to be on February 19.

It also maintained a $0.10 per share third-quarter dividend.

In response, shares in HSBC jumped 4.0% to 720.05 pence each in London on Tuesday morning. The wider FTSE 100 index was up 0.4%. In Hong Kong, HSBC shares closed up 3.7% at HK$71.60.

Net interest income fell 17% to $7.64 billion in the third quarter from $9.25 billion a year before, reflecting reductions due to business disposals, higher interest expense on liabilities and a loss on the early redemption of legacy securities.

Net interest margin dropped to 1.46% from 1.70% a year ago and 1.62% in the second quarter.

HSBC left guidance it gave in its July second-quarter results unchanged. It continues to target a mid-teens return on average tangible equity in 2024 and 2025.

Banking NII guidance of around $43 billion for 2024 remains unchanged, and HSBC continues to target cost growth of around 5% for 2024 compared with 2023.

The lender intends to manage its CET1 capital ratio within its medium-term target range of 14% to 14.5%. At September 30, the CET1 ratio stood at 15.2% compared with 14.8% at the end of 2023.

HSBC also expects to complete the sale of its business in Argentina in the fourth quarter.

Earlier this month, it announced an organisational revamp. From the start of next year, it will operate through four business lines, it explained. They will be the Hong Kong division, the UK arm, Corporate & Institutional Banking and International Wealth & Premier Banking.

On Tuesday, Elhedery said: ‘We will begin to implement these plans immediately and will share further details as part of a business update alongside our full-year results in February.’

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