We delivered a good set of results, maintained our strong momentum and retained a tight grip on costs.
Reported profit before tax,
3Q22 (down $2.3bn vs 3Q21)
3Q22 (up $3.1bn vs 3Q21)
Reported return on tangible equity
“We maintained our strong momentum in the third quarter and delivered a good set of results. Our strategy produced good organic growth in all three global businesses, and net interest income increased on the back of rising interest rates. We retained a tight grip on costs, despite inflationary pressures, and remain on track to achieve our cost targets for 2022 and 2023.”
“We are focused on executing our plans and delivering our returns target of at least 12% from 2023 onwards and, as a result, higher distributions to our shareholders.”
Noel Quinn, HSBC Group Chief Executive
25 October 2022
Wealth and Personal Banking,
3Q22 (up 25% vs 3Q21)
3Q22 (up 40% vs 3Q21)
Global Banking and Markets,
3Q22 (up 16% vs 3Q21)
Our revenue outlook remains positive and we now expect net interest income of approximately $32bn in 2022 and at least $36bn in 2023. At our interim results, we provided guidance of at least $37bn – this reduction reflects the impact of sterling depreciation against the US dollar and a higher cost of funding in our trading book. We continue to monitor the expected path of interest rates.
We expect ECL charges to be around 30 basis points of average loans in 2022. For 2023 we expect to be at the higher end of our planning range of between 30 to 40 basis points, but with a higher degree of volatility given the uncertain market outlook.
We remain on track for 2022 adjusted operating expenses to be broadly stable, compared with 2021, and to target 2% growth in 2023. Notwithstanding increasing inflationary pressures, we continue to maintain strict cost discipline.
The impact of our growth and transformation programmes, as well as the impact of higher global interest rates, mean we continue to target a return on average tangible equity of at least 12% from 2023 onwards.
While our common equity tier 1 ratio position is below our medium-term target range of 14% to 14.5%, we intend to manage back to the bottom-end of our target range during 1H23. Once we are back within our target range, we will continue to manage capital efficiently, returning excess capital to shareholders as appropriate.