HSBC Holdings plc Earnings Release 3Q24

HSBC Holdings PLC

29 October 2024

Georges Elhedery, Group Chief Executive, 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. Our strong organic capital generation enables us to announce a further $4.8bn of distributions in respect of the third quarter, which bring the total distributions announced so far in 2024 to $18.4bn.

I'm committed to building on this strong platform for growth. HSBC is a highly connected, global business and the plans we set out last week aim to increase our leadership and market share in areas where we have competitive advantage, deliver best-in-class products and service excellence to our customers, and create a simpler, more dynamic, more agile organisation with clearer lines of accountability and faster decision-making. 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."

Financial performance in 3Q24

- Profit before tax increased by $0.8bn to $8.5bn compared with 3Q23, primarily due to revenue growth in Wealth and Personal Banking ('WPB'), and in Foreign Exchange, Equities and Global Debt Markets in Global Banking and Markets ('GBM'). Profit before tax in 3Q24 included a $0.3bn loss on the early redemption of legacy securities. The 3Q23 period included $0.6bn of disposal losses relating to Treasury repositioning and risk management, which was partly offset by a $0.2bn gain on foreign exchange hedges relating to the disposal of our banking business in Canada. Profit after tax of $6.7bn was $0.5bn higher than in 3Q23.

- Constant currency profit before tax excluding notable items increased by $0.8bn to $8.7bn compared with 3Q23, as revenue growth and lower expected credit losses and other impairment charges ('ECL') were partly offset by a rise in operating expenses. This included a $0.2bn adverse impact from strategic transactions.

- Revenue increased by $0.8bn or 5% to $17.0bn compared with 3Q23. The growth in revenue reflected higher customer activity in our Wealth products in WPB, supported by volatile market conditions, and in Foreign Exchange, Equities and Global Debt Markets in GBM. Revenue in 3Q24 included a $0.3bn loss on the early redemption of legacy securities and a loss of $0.1bn from Treasury repositioning and risk management actions. On a constant currency basis, revenue rose by 7% to $17.0bn compared with 3Q23.

- Net interest income ('NII') of $7.6bn fell by $1.6bn compared with 3Q23, reflecting reductions due to business disposals, higher interest expense on liabilities and a loss on the early redemption of legacy securities. It also included an increase in funding costs associated with redeployment of our commercial surplus into the trading book, where the related revenue is recognised in 'net income from financial instruments held for trading or managed on a fair value basis'. Banking net interest income ('banking NII') fell by $1.0bn or 9% compared with 3Q23, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII. NII fell by $0.6bn compared with 2Q24, while the funding costs associated with funding the trading book increased by $0.3bn, which resulted in a fall in banking NII of $0.3bn.

- Net interest margin ('NIM') of 1.46% decreased by 24 basis points ('bps') compared with 3Q23, mainly due to higher interest expense on liabilities because of higher interest rates. NIM decreased by 16bps compared with 2Q24, reflecting higher interest expense on liabilities and an impact from the early redemption of legacy securities.

- ECL of $1.0bn were $0.1bn lower than in 3Q23, primarily reflecting lower charges in the mainland China commercial real estate sector in Commercial Banking ('CMB') and GBM, in part offset by an increase in ECL charges in WPB. ECL in 3Q24 comprised charges in CMB and GBM of $0.5bn, including against exposures in the onshore Hong Kong commercial real estate ($0.1bn) and mainland China commercial real estate sectors ($0.1bn), while charges in WPB of $0.5bn primarily related to our legal entities in Mexico, Hong Kong and in HSBC UK.

- Operating expenses of $8.1bn were $0.2bn or 2% higher than in 3Q23. The growth was primarily due to higher spend and investment in technology and the impacts of inflation, in part mitigated by continued cost discipline and the impact of our disposals in Canada and France. Target basis operating expenses were $0.4bn or 5% higher than in 3Q23, while they fell by 1% compared with 2Q24 driven by lower marketing costs and a lower performance-related pay accrual.

- Customer lending balances increased by $30bn compared with 2Q24. On a constant currency basis, lending balances increased by $2bn, including growth in WPB and CMB, notably in HSBC UK, while term lending balances decreased in GBM, notably in our main legal entity in Asia.

- Customer accounts increased by $67bn compared with 2Q24. On a constant currency basis, customer accounts increased by $20bn, mainly in our legal entity in Hong Kong due to an increase in term deposits prior to interest rate reductions and from short-term inflows into customer accounts amid equity market volatility. Deposits in GBM were broadly stable as an outflow of a large short-term deposit from a single client was partly offset by balance growth, notably in our legal entities in mainland China and the US.

- Common equity tier 1 ('CET1') capital ratio of 15.2% increased by 0.2 percentage points compared with 2Q24, mainly driven by capital generation, partly offset by the share buy-back announced at our interim results and an increase in risk-weighted assets ('RWAs').

- The Board has approved a third interim dividend of $0.10 per share. On 25 October 2024, we completed the $3bn share buy-back announced at our interim results. We now intend to initiate a share buy-back of up to $3bn, which we expect to complete within the four-month period before our 2024 full-year results announcement.

Financial performance in 9M24

- Profit before tax increased by $0.7bn to $30.0bn compared with 9M23, including a $0.2bn net favourable revenue impact of notable items relating to gains and losses recognised on certain strategic transactions. Profit after tax increased by $0.1bn to $24.4bn compared with 9M23.

- In 9M24, we completed the disposal of our banking business in Canada, recognising a gain of $4.8bn. We also recognised a $1.2bn impairment following the classification of our business in Argentina as held for sale. Results in 9M23 included the impact of a $2.1bn reversal of an impairment relating to the sale of our retail banking operations in France, which was subsequently reinstated in 4Q23 prior to completion, and a $1.6bn gain recognised on the acquisition of Silicon Valley Bank UK Limited ('SVB UK'). In addition, the 9M24 period included a $0.3bn loss on the early redemption of legacy securities, while 9M23 included $0.6bn of disposal losses relating to Treasury repositioning and risk management.

- Constant currency profit before tax excluding notable items increased by $0.7bn to $26.8bn compared with 9M23, as revenue growth and lower ECL charges were partly offset by a rise in operating expenses.

- Revenue increased by $1.3bn or 2% to $54.3bn compared with 9M23, including the gains and losses on certain strategic transactions described above and a $0.3bn loss on the early redemption of legacy securities. The growth in revenue reflected the impact of higher customer activity in our Wealth products in WPB, and in Equities and Securities Financing in GBM.

- NII of $24.5bn fell by $3.0bn compared with 9M23, reflecting reductions due to business disposals, higher interest expense in part due to deposit migration, and higher funding costs associated with the redeployment of our commercial surplus to the trading book, where the related revenue is recognised in 'net income from financial instruments held for trading or managed on a fair value basis'. Banking NII fell by $0.5bn or 2% compared with 9M23, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII, including the adverse impact of foreign currency translation differences.

- Constant currency revenue excluding notable items rose by $1.7bn to $50.9bn compared with 9M23, notably in Wealth in WPB, and in Equities and Securities Financing in GBM.

- NIM of 1.57% decreased by 13bps compared with 9M23 due to higher interest expense on liabilities because of higher interest rates and increased deployment of our commercial surplus to the trading book.

- ECL were $2.1bn, a reduction of $0.4bn compared with 9M23. The reduction included lower charges relating to exposures in the commercial real estate sector in mainland China, and lower charges in HSBC UK, partly offset by higher ECL charges in WPB, notably against unsecured lending in our legal entity in Mexico. Annualised ECL charges were 28bps of average gross loans, including loans and advances classified as held for sale.

- Operating expenses increased by $1.0bn or 4% to $24.4bn compared with 9M23, mainly due to higher spend and investment in technology and the impacts of inflation, while the performance-related pay accrual was higher than in 9M23. These increases were partly offset by reductions related to our business disposals in Canada and France. Target basis operating expenses rose by $1.4bn or 6% compared with 9M23. Target basis operating expenses are measured on a constant currency basis, excluding notable items, the impact of retranslating the results of hyperinflationary economies at constant currency, and the direct costs from the sales of our French retail banking operations and our banking business in Canada.

Outlook

- Our guidance remains unchanged from that set out at our Interim results on 31 July 2024.

- We continue to target a mid-teens return on average tangible equity ('RoTE') in 2024 and 2025, excluding the impact of notable items, while acknowledging the outlook for interest rates has changed, and been volatile, since our 1H24 results announcement in July.

- Our banking NII guidance of around $43bn for 2024 remains unchanged and we continue to target cost growth of approximately 5% for 2024 compared with 2023, on a target basis. ECL charges as a percentage of average gross loans in 2024 are expected to be within our medium-term planning range of 30bps to 40bps (including customer lending balances transferred to held for sale).

- Our guidance reflects our current outlook for the global macroeconomic environment, including customer and financial markets activity. This includes our modelling of a number of market-dependent factors, such as market-implied interest rates (as of mid-October 2024), as well as customer behaviour and activity levels.

- We intend to manage our CET1 capital ratio within our medium-term target range of 14% to 14.5%, with a dividend payout ratio target basis of 50% for 2024, which excludes material notable items and related impacts.

- We continue to make progress on reshaping the Group. We expect to complete the sale of our business in Argentina in 4Q24. On completion, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. These impacts have already been recognised in capital. At 30 September 2024, foreign currency translation reserve and other reserve losses stood at $5.1bn.

· Note: we do not reconcile our forward guidance on RoTE excluding notable items, target basis operating expenses, dividend payout ratio target basis or banking NII to their equivalent reported measures.


Contents
1	Group Chief Executive statement	25	- Global Banking and Markets - constant currency basis
1	Financial performance in 3Q24	28	- Corporate Centre - constant currency basis
2	Financial performance in 9M24	30	Supplementary financial information
2	Outlook	30	- Reported and constant currency results
3	Business highlights	31	- Global businesses
5	Financial summary	38	- Legal entities
5	- Use of alternative performance measures	44	Alternative performance measures
6	- Key financial measures: basis of preparation	44	- Use of alternative performance measures
7	- Disposal groups and business acquisitions	44	- Alternative performance measure definitions
9	- Key financial metrics	48	Risk
10	- Summary consolidated income statement	48	- Managing risk
11	- Distribution of results by global business and legal entity	49	- Credit risk
12	- Income statement commentary	61	- Capital risk
17	- Summary consolidated balance sheet	65	Additional information
18	- Balance sheet commentary	65	- Dividends
20	Global businesses	66	- Investor relations/media relations contacts
20	- Wealth and Personal Banking - constant currency basis	66	- Cautionary statement regarding forward-looking statements
23	- Commercial Banking - constant currency basis	68	- Abbreviations

Presentation to investors and analysts

HSBC Holdings plc will be conducting a trading update conference call with analysts and investors today to coincide with the publication of this Earnings Release 3Q24. The call will take place at 07.45am GMT. Details of how to participate in the call and the live audio webcast can be found at www.hsbc.com/investors.

About HSBC

HSBC Holdings plc, the parent company of HSBC, is headquartered in London. With assets of $3.1tn at 30 September 2024, HSBC is one of the world's largest banking and financial services organisations.

Our strategy

HSBC's purpose is 'Opening up a world of opportunity'. Our strategy supports our ambition of being the preferred international financial partner for our clients, centred around four key areas.

- Focus - maintain leadership in scale markets, double-down on international connectivity, diversify our revenue and maintain cost discipline and reshape our portfolio;

- Digitise - deliver seamless customer experience, ensure resilience and security, embrace disruptive technologies and partner with innovators, and automate and simplify at scale;

- Energise - inspire leaders to drive performance and delivery, unlock our edge to enable success, deliver a unique and exceptional colleague experience and prepare our workforce for the future;

- Transition - support our customers, embed net zero into the way we operate, partner for systemic change, become net zero in our own operations and supply chain by 2030, and our financed emissions by 2050.

Business highlights

We continue to target a mid-teens RoTE in 2024 and 2025, excluding the impact of notable items, while acknowledging the outlook for interest rates has changed, and been volatile, since our 1H24 results announcement in July. We remain focused on growth opportunities within our strategy that play to our strengths, while maintaining tight cost discipline and continuing to invest in growth and efficiency.

Growth opportunities include further expanding our international businesses, diversification of our revenue, including building our wealth business, especially in Asia, continuing to grow in our home markets in Hong Kong and the UK, and also the diversification of our profit generation across the other markets in which we operate.

We have continued to demonstrate strategic progress during 9M24. At 30 September 2024, wealth balances were $1.9tn, an increase of 15% compared with the same period last year. Within this we have attracted net new invested assets of $59bn in the first nine months of 2024, with $49bn booked in Asia. Revenue in Wealth was up $0.9bn or 16% on a constant currency basis, with an increase in Asia of 27%. There was a strong performance in our insurance business, which was up 28%, and growth in insurance manufacturing new business contractual service margin in WPB of $0.8bn, up 58% compared with 9M23. We grew mortgage lending balances by $5bn since 31 December 2023 on a constant currency basis, notably in HSBC UK. In addition, we generated revenue of $19.8bn from transaction banking during 9M24, which was broadly stable compared with 9M23. This reflected growth in Global Payments Solutions ('GPS') in both CMB and GBM, across both NII and net fee income, which was broadly offset by lower revenue in Global Foreign Exchange.

We remain focused on maintaining tight cost discipline and generating cost savings that will help enable us to invest in technology to improve customer experience while also increasing efficiency and resilience. We also have an ambition to build a stronger performance culture, improving our colleague experience and preparing our workforce for the future. Finally, we also see commercial opportunities in helping to finance the new economy and in supporting the significant investment needs of our customers in the transition to net zero, as well as the importance of helping to mitigate the rising financial and wider societal risks posed by climate change.

We continue to make progress on reshaping the Group for growth. So far in 2024, we have completed the sales of our retail banking operations in France, our banking business in Canada and our business in Russia. In addition, we announced the planned sales of our business in Argentina and our operations in Armenia, which we expect to complete in the fourth quarter of 2024. We also completed the acquisition of SilkRoad Property Partners Group in Singapore and Citi's retail wealth management portfolio in mainland China. We have also announced divestments in our private banking business in Germany and our business in South Africa, and we have launched a strategic review of our business in Malta. The review is at an early stage and no decisions have been made.

For further details of these transactions, see 'Disposal groups and business acquisitions' on page 7.

On 22 October 2024, we announced that we are simplifying our organisational structure to accelerate delivery against our strategic priorities. Effective 1 January 2025, the Group will operate through four businesses: Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking. The Group's functions will be realigned to support the four new businesses. Our strategic priorities remain unchanged. These changes are aimed at increasing focus on leadership and market share in the areas where we have clear competitive advantages, creating a simpler organisation with clarity of accountability and faster decision-making, and reducing the duplication of processes that are built into our current matrix structure. We expect to share further details of these changes at our 2024 annual results, expected to be announced on 19 February 2025.

ESG update

We have continued with our implementation plan to embed net zero into the way we support our customers, the way we operate as an organisation and how we partner externally in support of systemic change. We seek to harness our strengths and capabilities in the areas where we believe we can best support large-scale emissions reductions, transitioning industry, catalysing the new economy and decarbonising supply chains.

We published our Net Zero Transition plan on 25 January 2024, and in accordance with the Transition Plan Taskforce guidance, we are performing our annual review in 4Q24. An update will be provided in our Annual Report and Accounts 2024.

Financial summary

Notes

- Income statement comparisons, unless stated otherwise, are between the quarter ended 30 September 2024 and the quarter ended 30 September 2023. Balance sheet comparisons, unless otherwise stated, are between balances at 30 September 2024 and the corresponding balances at 31 December 2023.

- The financial information on which this Earnings Release 3Q24 is based is unaudited. It has been prepared in accordance with our material accounting policies as described on pages 341 to 354 of the Annual Report and Accounts 2023.

Use of alternative performance measures

Our reported results are prepared in accordance with IFRS Accounting Standards as detailed in our financial statements starting on page 329 of the Annual Report and Accounts 2023.

To measure our performance, we supplement our IFRS Accounting Standards figures with non-IFRS Accounting Standards measures, which constitute alternative performance measures under European Securities and Markets Authority guidance and non-GAAP financial measures defined in and presented in accordance with US Securities and Exchange Commission rules and regulations. These measures include those derived from our reported results that eliminate factors that distort period-on-period comparisons. The 'constant currency performance' measure used in this Earnings Release 3Q24 is described below. Definitions and calculations of other alternative performance measures are included in 'Alternative performance measures' on page 44. All alternative performance measures are reconciled to the closest reported performance measure.

Constant currency performance

Constant currency performance is computed by adjusting reported results of comparative periods for the effects of foreign currency translation differences, which distort period-on-period comparisons.

We consider constant currency performance to provide useful information for investors by aligning internal and external reporting, and reflecting how management assesses period-on-period performance.

Notable items and material notable items

We separately disclose 'notable items', which are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature. From 1H24, we now disclose 'profit before tax excluding notable items' and 'revenue excluding notable items'. We have introduced these new measures due to the significant impact of notable items on the Group's results. We consider profit before tax excluding notable items and revenue excluding notable items as useful information in understanding period-on-period performance.

Certain notable items are classified as 'material notable items', which are a subset of notable items. Categorisation as a material notable item is dependent on the nature of each item in conjunction with the financial impact on the Group's income statement.

The tables on pages 31 to 34 and pages 38 to 43 detail the effects of notable items on each of our global business segments and legal entities in 9M24, 9M23, 3Q24, 2Q24 and 3Q23.

Impact of strategic transactions

To aid the understanding of our results, we separately disclose the impact of strategic transactions classified as material notable items on the results of the Group and our global businesses. At 3Q24, strategic transactions classified as material notable items in current and comparative periods comprise the disposal of our retail banking operations in France, the disposal of our banking business in Canada, the planned sale of our business in Argentina and the acquisition of SVB UK.

The impacts of strategic transactions include the gains or losses on classification to held for sale or on acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. This is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions.

See page 36 for supplementary analysis of the impact of strategic transactions.

Constant currency revenue and profit before tax excluding notable items

We separately report 'constant currency revenue excluding notable items' and 'constant currency profit before tax excluding notable items', which exclude the impact of notable items and the impact of foreign exchange translation. We consider that these measures provide useful information to investors as they remove items that distort period-on-period comparisons.

For a reconciliation of constant currency revenue excluding notable items and constant currency profit before tax excluding notable items to reported revenue and reported profit before tax respectively, see page 45.

Constant currency revenue and profit before tax excluding notable items and the impact of strategic transactions

To aid the understanding of our results, we separately disclose 'constant currency revenue excluding notable items and the impact of strategic transactions' and 'constant currency profit before tax excluding notable items and the impact of strategic transactions'. These measures exclude the impact of strategic transactions classified as material notable items from constant currency revenue and profit before tax excluding notable items. At 3Q24, strategic transactions classified as material notable items in current and comparative periods comprise the disposals of our retail banking operations in France and our banking business in Canada, the planned sale of our business in Argentina and the acquisition of SVB UK.

The impacts quoted include the gains or losses on classification to held for sale or acquisition and all other related notable items. They also include the distorting impact between the periods of the operating income statement results related to acquisitions and disposals that affect period-on-period comparisons. This is computed by including the operating income statement results of each business in any period for which there are no results in the comparative period. We consider the monthly impacts of distorting income statement results when calculating the impact of strategic transactions.

For a reconciliation of constant currency revenue excluding notable items and strategic transactions and constant currency profit before tax excluding notable items and strategic transactions to reported revenue and reported profit before tax respectively, see page 45.

Foreign currency translation differences

Foreign currency translation differences reflect the movements of the US dollar against most major currencies during 2024. We exclude them to derive constant currency data, allowing us to assess balance sheet and income statement performance on a like-for-like basis and to better understand the underlying trends in the business.

Foreign currency translation differences for 9M24 and 3Q24 are computed by retranslating into US dollars for non-US dollar branches, subsidiaries, joint ventures and associates:

- the income statement for 9M23 at the average rate of exchange for 9M24;

- the income statement for the quarterly periods at the average rate of exchange for 3Q24;

- the closing prior period balance sheets at the prevailing rates of exchange on 30 September 2024.

No adjustment has been made to the exchange rates used to translate foreign currency-denominated assets and liabilities into the functional currencies of any HSBC branches, subsidiaries, joint ventures or associates. The constant currency data of our operations in Argentina and Türkiye has not been adjusted further for the impacts of hyperinflation. When reference is made to foreign currency translation differences in tables or commentaries, comparative data reported in the functional currencies of HSBC's operations has been translated at the appropriate exchange rates applied in the current period on the basis described above.

Global business performance

The Group Chief Executive, supported by the rest of the Group Executive Committee ('GEC'), is considered to be the Chief Operating Decision Maker ('CODM') for the purposes of identifying the Group's reportable segments.

The Group Chief Executive and the rest of the GEC review operating activity on a number of bases, including by global business and legal entities. Our global businesses - Wealth and Personal Banking, Commercial Banking and Global Banking and Markets - along with Corporate Centre - are our reportable segments under IFRS 8 'Operating Segments'. Global business results are assessed by the CODM on the basis of constant currency performance, which removes the effects of currency translation impacts from reported results. Therefore, we present these results on a constant currency basis.

As required by IFRS 8, reconciliations of the constant currency results to the Group's reported results are presented on page 30. Supplementary reconciliations of constant currency to reported results by global business are presented on pages 31 to 34 for information purposes.

Management view of revenue on a constant currency basis

Our global business segment commentary includes tables that provide breakdowns of revenue on a constant currency basis by major product. These reflect the basis on which revenue performance of the businesses is assessed and managed.

Key financial measures: basis of preparation

Return on average tangible equity excluding notable items

From 1 January 2024, we revised the adjustments made to our adjusted RoTE measure. Prior to this we adjusted RoTE for the impact of strategic transactions and the impairment of our investment in Bank of Communications Co., Limited ('BoCom'), whereas from 1 January 2024 we have excluded all notable items. This was intended to improve alignment with the treatment of notable items in our other income statement disclosures. RoTE excluding notable items has been re-presented for 3Q23 and 9M23 on the revised basis and we no longer disclose RoTE excluding strategic transactions and the impairment of BoCom. The calculation for RoTE excluding notable items adjusts the 'profit attributable to ordinary shareholders, excluding goodwill and other intangible assets impairment' for the post-tax impact of notable items. It also adjusts the 'average tangible equity' for the post-tax impact of notable items in each period, which remain as adjusting items for all relevant periods within that calendar year.

For a reconciliation from return on equity to RoTE excluding notable items, see page 45. We continue to target a RoTE excluding notable items in the mid-teens for both 2024 and 2025. We do not reconcile our forward RoTE guidance to the equivalent reported measure.

Banking net interest income

Banking NII adjusts our NII, primarily for the impact of funding trading and fair value activities reported in interest expense. It represents the Group's banking revenue that is directly impacted by changes in interest rates. We use this measure to determine the deployment of our commercial surplus, and to help optimise our structural hedging and risk management actions.

For more information on banking NII, see page 16.

Target basis operating expenses

Target basis operating expenses is computed by excluding the direct cost impact of our retail banking operations in France and Canada banking business disposals from the 2023 baseline. It is measured on a constant currency basis and excludes notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency, which we consider to be outside of our control. We consider target basis operating expenses to provide useful information to investors by quantifying and excluding the notable items that management considered when setting and assessing cost-related targets. For a reconciliation of reported operating expenses to target basis operating expenses, see page 47.

In 2024, we are targeting cost growth of approximately 5% compared with 2023 on a target basis. This target reflects our current business plan for 2024, and includes an increase in staff compensation, higher technology spend and investment for growth and efficiency, in part mitigated by cost savings from actions taken during 2023. We do not reconcile our forward target basis operating expenses guidance to reported operating expenses.

Dividend payout ratio target basis

Given our current returns trajectory, we are targeting a dividend payout ratio target basis of 50% for 2024. For the purposes of computing our dividend payout ratio target basis, we exclude from earnings per share material notable items and related impacts. Material notable items are components of our income statement that management would consider as outside the normal course of business and generally non-recurring in nature, which are excluded from our dividend payout ratio calculation and our earnings per share measure, along with related impacts.

Material notable items for the dividend payout ratio target basis comprise the impacts of the sales of our banking business in Canada and our retail banking operations in France, the gain following the acquisition of SVB UK, the impacts of the planned sale of our business in Argentina and the impairment of BoCom. We also exclude HSBC Bank Canada's financial results from the 30 June 2022 net asset reference date until completion, as the gain on sale was recognised through a combination of the consolidation of HSBC Bank Canada's results into the Group's results since this date, and the remaining gain on sale was recognised at completion, inclusive of the recycling of related reserves and fair value gains on related hedges. Following the completion of the sale of our banking business in Canada, the Board approved a special dividend of $0.21 per share, which was paid in June 2024, alongside the first interim dividend.

For a reconciliation of basic earnings per share to basic earnings per share excluding material notable items and related impacts, see page 47. We do not reconcile our forward dividend payout ratio target basis guidance to the reported dividend payout ratio.

Disposal groups and business acquisitions

France retail banking operations

On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS ('My Money Group'). The sale also included HSBC Continental Europe's 100% ownership interest in HSBC SFH (France) and its 3% ownership interest in Crédit Logement.

Upon completion and in accordance with the terms of the sale, HSBC Continental Europe received a €0.1bn ($0.1bn) profit participation interest in the ultimate holding company of My Money Group. The associated impacts on initial recognition of this stake at fair value were recognised as part of the pre-tax loss on disposal in 2023, upon the reclassification of the disposal group as held for sale. In accordance with the terms of the sale, HSBC Continental Europe retained a portfolio of €7.1bn ($7.9bn) at the time of sale, consisting of home and certain other loans, and the CCF brand, which it licensed to the buyer under a long-term licence agreement. Additionally, HSBC Continental Europe's subsidiaries, HSBC Assurances Vie (France) and HSBC Global Asset Management (France), have entered into distribution agreements with the buyer.

The customer lending balances and associated income statement impacts of the portfolio of retained loans, together with the profit participation interest and the licence agreement of the CCF brand, were reclassified from WPB to Corporate Centre, with effect from 1 January 2024.

During the fourth quarter of 2024, we intend to begin actively marketing the retained portfolio for sale. As a result, we expect to reclassify the portfolio to a hold-to-collect-and-sell business model and measure it prospectively from the first quarter of 2025 at fair value through other comprehensive income, unless a sale is completed during the fourth quarter. On the reclassification date, we expect to recognise an estimated $1bn fair value pre-tax loss in other comprehensive income on the remeasurement of the financial instruments, equivalent to an estimated 10bps reduction in the Group's CET1 ratio. The valuation of this portfolio of loans may be substantially different in the event of a sale due to entity and deal-specific factors, including funding costs and the value of customer relationships. Upon completion of a sale, the cumulative fair value changes recognised through other comprehensive income, which would reflect the terms of an agreed sale, would reclassify to the income statement.

Canada banking business

On 28 March 2024, HSBC Overseas Holdings (UK) Limited, a direct subsidiary of HSBC Holdings plc, completed the sale of HSBC Bank Canada to the Royal Bank of Canada.

The completion of the transaction resulted in a gain on sale of $4.8bn inclusive of recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn in other reserves losses. The gain on sale also included $0.3bn in fair value gains recognised on the related foreign exchange hedges in the first quarter of 2024. There was no tax on the gain recognised at completion due to the substantial shareholding exemption rule in the UK.

Following the completion of this transaction, the Board approved a special dividend of $0.21 per share, which was paid in June 2024 alongside the first interim dividend of 2024.

Argentina business

On 9 April 2024, HSBC Latin America B.V. entered into a binding agreement to sell its business in Argentina to Grupo Financiero Galicia ('Galicia'). Galicia will acquire all of HSBC Argentina's business covering banking, asset management and insurance, together with $100m of subordinated debt issued by HSBC Argentina and held by HSBC Latin America Holdings (UK) Limited for a base consideration of $550m. The consideration will be adjusted for the results of the business and fair value gains or losses on HSBC Argentina's securities portfolios during the period between 31 December 2023 and closing. HSBC expects to receive the purchase consideration in a combination of cash and Galicia's American Depositary Receipts ('ADRs'), with such ADRs representing less than a 10% economic interest in Galicia. The transaction is expected to be completed in the fourth quarter of 2024. At 31 March 2024, given the advanced stage of agreement on deal terms and that completion was expected in 12 months, our investment in HSBC Argentina met the criteria to be classified as held for sale in accordance with IFRS 5. At 30 September 2024, total assets of $6.8bn and total liabilities of $4.9bn were classified as held for sale, and we recognised a $1.2bn pre-tax loss in 9M24. There was no tax deduction on the loss recognised. At closing, expected in the fourth quarter of 2024, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. At 30 September 2024, foreign currency translation reserve and other reserve losses stood at $5.1bn. Between signing and closing, the loss on sale will vary by changes in the net asset value of the disposed business and associated hyperinflation and foreign currency translation, and the fair value of consideration including price adjustments and migration costs.

Other disposals

On 30 May 2024, HSBC Europe BV, a wholly-owned subsidiary of HSBC Bank plc, completed the sale of its business in Russia - HSBC Bank (RR) (Limited Liability Company) - to Expobank. Foreign currency translation reserve losses of $0.1bn were recognised in the income statement upon completion. On 6 February 2024, following a strategic review of our operations in Armenia, HSBC Europe BV reached an agreement for the sale of HSBC Bank Armenia to Ardshinbank. This resulted in a loss on classification to held for sale of $0.1bn. The transaction is subject to regulatory approvals. As part of this transaction, all staff members of HSBC Armenia will transfer to Ardshinbank at completion, and the transfer will include all customer relationships held by HSBC Armenia at that time. The transaction is expected to complete in the fourth quarter of 2024. On 6 July 2024, The Hongkong and Shanghai Banking Corporation Limited (acting through its Mauritius branch) completed the sale of its Wealth and Personal Banking business in Mauritius to Absa Bank (Mauritius) Limited, a wholly-owned subsidiary of Absa Group Limited. The financial impact of the sale was not significant for the Group. On 23 September 2024, HSBC Continental Europe reached an agreement to sell its private banking business in Germany to BNP Paribas. This sale, which remains subject to governmental approvals and works council consultation, is expected to be completed in the second half of 2025. At 30 September 2024, total assets of $2.7bn and total liabilities of $2.7bn met the criteria to be classified as held for sale in accordance with IFRS 5. The sale is expected to generate an estimated pre-tax gain on disposal of $0.2bn, which will be recognised on completion, expected in the third quarter of 2025. On 30 September 2024, HSBC reached an agreement to sell its business in South Africa to local lender FirstRand Bank Ltd. The transaction is expected to be completed in the fourth quarter of 2025 and is subject to regulatory and government approvals. At closing, cumulative foreign currency translation reserves and other reserves will recycle to the income statement. At 30 September 2024, foreign currency translation reserve and other reserve losses stood at $0.2bn. In September 2024, HSBC launched a strategic review of its shareholding in HSBC Bank Malta p.l.c. The review is at an early stage and no decisions have been made.

Business acquisitions

In October 2023, HSBC Global Asset Management Singapore Limited, a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, entered into an agreement to acquire 100% of the shares of Silkroad Property Partners Pte Ltd ('Silkroad') and for HSBC Global Asset Management Limited to acquire Silkroad's affiliated General Partner entities. Silkroad is a Singapore headquartered Asia-Pacific-focused, real estate investment manager. The acquisition was completed on 31 January 2024.

In October 2023, HSBC Bank (China) Company Limited, a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, entered into an agreement to acquire Citibank China's retail wealth management portfolio in mainland China. The portfolio comprises assets under management and deposits and the associated wealth customers. The acquisition was completed on 7 June 2024.

Key financial metrics

	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
Reported results
Profit before tax ($m)	30,032	29,371	8,476	8,906	7,714
Profit after tax ($m)	24,414	24,337	6,749	6,828	6,266
Revenue ($m)	54,290	53,037	16,998	16,540	16,161
Cost efficiency ratio (%)	45.0	44.2	47.9	49.2	49.3
Net interest margin (%)	1.57	1.70	1.46	1.62	1.70
Basic earnings per share ($)	1.23	1.15	0.34	0.35	0.29
Diluted earnings per share ($)	1.22	1.14	0.34	0.34	0.29
Dividend per ordinary share (in respect of the period) ($)¹	0.30	0.30	0.10	0.10	0.10

Alternative performance measures
Constant currency profit before tax ($m)	30,032	29,095	8,476	8,979	7,624
Constant currency revenue ($m)	54,290	52,389	16,998	16,656	15,887
Constant currency cost efficiency ratio (%)	45.0	44.0	47.9	49.3	49.2
Constant currency revenue excluding notable items ($m)	50,930	49,226	17,209	16,820	16,150
Constant currency profit before tax excluding notable items ($m)	26,799	26,051	8,732	9,176	7,935
Constant currency revenue excluding notable items and strategic transactions ($m)	50,752	48,004	17,209	16,819	15,591
Constant currency profit before tax excluding notable items and strategic transactions ($m)	26,709	25,637	8,732	9,177	7,701
Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers (%)	0.28	0.32	0.40	0.13	0.42
Expected credit losses and other credit impairment charges (annualised) as a % of average gross loans and advances to customers, including held for sale (%)	0.28	0.30	0.40	0.13	0.39
Basic earnings per share excluding material notable items and related impacts ($)	1.02	0.97	0.34	0.35	0.27
Return on average ordinary shareholders' equity (annualised) (%)	17.9	18.3	14.4	15.2	13.5
Return on average tangible equity (annualised) (%)	19.3	19.7	15.5	16.3	14.6
Return on average tangible equity excluding notable items (annualised) (%)	16.7	17.5	15.9	17.1	15.0
Target basis operating expenses ($m)	24,150	22,711	8,098	8,194	7,729

	At
	30 Sep 2024	30 Jun 2024	31 Dec 2023
Balance sheet
Total assets ($m)	3,098,621	2,975,003	3,038,677
Net loans and advances to customers ($m)	968,653	938,257	938,535
Customer accounts ($m)	1,660,715	1,593,834	1,611,647
Average interest-earning assets, year to date ($m)	2,094,585	2,097,866	2,161,746
Loans and advances to customers as % of customer accounts (%)	58.3	58.9	58.2
Total shareholders' equity ($m)	192,754	183,293	185,329
Tangible ordinary shareholders' equity ($m)	161,880	153,109	155,710
Net asset value per ordinary share at period end ($)	9.66	8.97	8.82
Tangible net asset value per ordinary share at period end ($)	9.00	8.35	8.19
Capital, leverage and liquidity
Common equity tier 1 capital ratio (%)^2,3	15.2	15.0	14.8
Risk-weighted assets ($m)^2,3	863,923	835,118	854,114
Total capital ratio (%)^2,3	20.8	20.6	20.0
Leverage ratio (%)^2,3	5.7	5.7	5.6
High-quality liquid assets (liquidity value) ($m)^3,4	649,199	646,052	647,505
Liquidity coverage ratio (%)^3,4,5	137	137	136
Share count
Period end basic number of $0.50 ordinary shares outstanding (millions)	17,982	18,330	19,006
Period end basic number of $0.50 ordinary shares outstanding and dilutive potential ordinary shares (millions)	18,119	18,456	19,135
Average basic number of $0.50 ordinary shares outstanding (millions)	18,493	18,666	19,478

For reconciliations of our reported results to a constant currency basis, including lists of notable items, see page 30. Definitions and calculations of other alternative performance measures are included in 'Alternative performance measures' on page 44.

1 The amount for the nine months ended 30 September 2024 excludes the special dividend of $0.21 per ordinary share arising from the proceeds of the sale of our banking business in Canada to Royal Bank of Canada.

2 Unless otherwise stated, regulatory capital ratios and requirements are based on the transitional arrangements of the Capital Requirements Regulation in force at the time. References to EU regulations and directives (including technical standards) should, as applicable, be read as references to the UK's version of such regulation or directive, as onshored into UK law under the European Union (Withdrawal) Act 2018, and as may be subsequently amended under UK law.

3 Regulatory numbers and ratios are as presented at the date of reporting. Small changes may exist between these numbers and ratios and those subsequently submitted in regulatory filings. Where differences are significant, we may restate in subsequent periods.

4 The liquidity coverage ratio is based on the average value of the preceding 12 months.

5 We enhanced our calculation processes during 1H24. As the Group liquidity coverage ratio is reported as a 12-month average, the benefit of these changes is being recognised incrementally over the year starting from 30 June 2024.

Summary consolidated income statement

	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
	$m	$m	$m	$m	$m
Net interest income¹	24,548	27,512	7,637	8,258	9,248
Net fee income	9,322	9,088	3,122	3,054	3,003
Net income from financial instruments held for trading or managed on a fair value basis²	15,814	12,564	5,298	5,110	4,452
Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or loss	7,889	1,738	5,513	1,084	(2,566)
Insurance finance expense	(7,948)	(1,703)	(5,462)	(1,159)	2,531
Insurance service result	1,001	696	339	356	172
Gain on acquisition³	-	1,593	-	-	86
Gain less impairment relating to sale of business operations⁴	3,328	2,130	72	(161)	-
Other operating (expense)/income	336	(581)	479	(2)	(765)
Net operating income before change in expected credit losses and other credit impairment charges⁵	54,290	53,037	16,998	16,540	16,161
Change in expected credit losses and other credit impairment charges	(2,052)	(2,416)	(986)	(346)	(1,071)
Net operating income	52,238	50,621	16,012	16,194	15,090
Total operating expenses excluding impairment of goodwill and other intangible assets	(24,388)	(23,720)	(8,138)	(8,100)	(7,967)
(Impairment)/reversal of impairment of goodwill and other intangible assets	(51)	295	(5)	(45)	(1)
Operating profit	27,799	27,196	7,869	8,049	7,122
Share of profit in associates and joint ventures	2,233	2,175	607	857	592
Profit before tax	30,032	29,371	8,476	8,906	7,714
Tax expense	(5,618)	(5,034)	(1,727)	(2,078)	(1,448)
Profit after tax	24,414	24,337	6,749	6,828	6,266
Attributable to:
- ordinary shareholders of the parent company	22,720	22,585	6,134	6,403	5,619
- other equity holders	908	976	382	125	434
- non-controlling interests	786	776	233	300	213
Profit after tax	24,414	24,337	6,749	6,828	6,266
	$	$	$	$	$
Basic earnings per share	1.23	1.15	0.34	0.35	0.29
Diluted earnings per share	1.22	1.14	0.34	0.34	0.29
Dividend per ordinary share (paid in the period)	0.51	0.43	0.10	0.10	0.10
	%	%	%	%	%
Return on average ordinary shareholders' equity (annualised)	17.9	18.3	14.4	15.2	13.5
Return on average tangible equity (annualised)	19.3	19.7	15.5	16.3	14.6
Cost efficiency ratio	45.0	44.2	47.9	49.2	49.3

1 Includes a $283m loss in 3Q24 related to the early redemption of legacy securities.

2 Includes a $255m gain (9M23: $284m loss) on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada.

3 Gain recognised in respect of the acquisition of SVB UK.

4 For the nine months ending 30 September 2024, a gain of $4.6bn, inclusive of the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses but excluding the $255m gain on the foreign exchange hedging (see footnote 2 above), on the sale of our banking business in Canada, and an impairment loss of $1.2bn relating to the planned sale of our business in Argentina was recognised.

5 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Distribution of results by global business and legal entity

Distribution of results by global business
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
	$m	$m	$m	$m	$m
Constant currency revenue¹
Wealth and Personal Banking²	21,723	22,678	7,411	7,162	6,584
Commercial Banking	16,284	17,378	5,388	5,406	5,292
Global Banking and Markets	13,154	12,154	4,412	4,333	3,833
Corporate Centre²	3,129	179	(213)	(245)	178
Total	54,290	52,389	16,998	16,656	15,887
Constant currency profit/(loss) before tax
Wealth and Personal Banking²	9,684	11,403	3,226	3,304	2,778
Commercial Banking	9,464	10,730	3,001	3,210	2,797
Global Banking and Markets	5,662	4,670	1,849	1,804	1,261
Corporate Centre²	5,222	2,292	400	661	788
Total	30,032	29,095	8,476	8,979	7,624

1 Constant currency net operating income before change in expected credit losses and other credit impairment charges including the effects of foreign currency translation differences, also referred to as constant currency revenue.

2 On 1 January 2024, HSBC Continental Europe completed the sale of its retail banking operations in France to CCF, a subsidiary of Promontoria MMB SAS ('My Money Group'). With effect from this date, we have prospectively reclassified the portfolio of retained loans, profit participation interest and licence agreement of the CCF brand from WPB to Corporate Centre.

Distribution of results by legal entity
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
	$m	$m	$m	$m	$m
Reported profit/(loss) before tax
HSBC UK Bank plc	5,555	6,569	1,821	1,923	1,778
HSBC Bank plc	2,437	4,405	1,001	739	907
The Hongkong and Shanghai Banking Corporation Limited	16,005	15,000	5,112	5,436	4,083
HSBC Bank Middle East Limited	867	1,023	331	253	350
HSBC North America Holdings Inc.	446	886	23	170	185
HSBC Bank Canada	186	695	-	-	220
Grupo Financiero HSBC, S.A. de C.V.	682	658	216	280	222
Other trading entities¹	1,477	1,740	443	644	458
- of which: other Middle East entities (including Oman, Türkiye, Egypt and Saudi Arabia)	629	542	218	197	120
- of which: Saudi Awwal Bank	464	391	147	172	118
Holding companies, shared service centres and intra-Group eliminations²	2,377	(1,605)	(471)	(539)	(489)
Total	30,032	29,371	8,476	8,906	7,714
Constant currency profit/(loss) before tax
HSBC UK Bank plc	5,555	6,766	1,821	1,980	1,827
HSBC Bank plc	2,437	4,465	1,001	755	926
The Hongkong and Shanghai Banking Corporation Limited	16,005	14,880	5,112	5,475	4,098
HSBC Bank Middle East Limited	867	1,024	331	254	351
HSBC North America Holdings Inc.	446	887	23	170	185
HSBC Bank Canada	186	688	-	-	216
Grupo Financiero HSBC, S.A. de C.V.	682	662	216	255	200
Other trading entities¹	1,477	1,329	443	629	306
- of which: other Middle East entities (including Oman, Türkiye, Egypt and Saudi Arabia)	629	408	218	192	73
- of which: Saudi Awwal Bank	464	391	147	171	118
Holding companies, shared service centres and intra-Group eliminations²	2,377	(1,606)	(471)	(539)	(485)
Total	30,032	29,095	8,476	8,979	7,624

1 Other trading entities includes the results of entities located in Oman (pre merger with Sohar International Bank SAOG in August 2023), Türkiye, Egypt and Saudi Arabia (including our share of the results of Saudi Awwal Bank) which do not consolidate into HSBC Bank Middle East Limited. Supplementary analysis is provided on page 43 for a fuller picture of the Middle East, North Africa and Türkiye ('MENAT') regional performance.

2 Includes a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses. This is partly offset by a $1.2bn impairment recognised in relation to the planned sale of our business in Argentina.

Tables showing constant currency profit before tax by global business and legal entity are presented to support the commentary on constant currency performance on pages 13 and 15.

The tables on pages 31 to 43 reconcile reported to constant currency results for each of our global business segments and legal entities.

Income statement commentary

3Q24 compared with 3Q23 - reported results

Movement in reported profit compared with 3Q23
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	16,998	16,161	837	5	(811)
ECL	(986)	(1,071)	85	8	19
Operating expenses	(8,143)	(7,968)	(175)	(2)	338
Share of profit/(loss) from associates and JVs	607	592	15	3	-
Profit before tax	8,476	7,714	762	10	(454)
Tax expense	(1,727)	(1,448)	(279)	(19)
Profit after tax	6,749	6,266	483	8

1 For details, see 'Strategic transactions supplementary analysis' on page 36.

Notable items
	Quarter ended
	30 Sep 2024	30 Sep 2023
	$m	$m
Revenue
Disposals, acquisitions and related costs	72	310
Fair value movements on financial instruments¹	-	-
Disposal losses on Markets Treasury repositioning	-	(578)
Early redemption of legacy securities	(283)	-
Currency translation on revenue notable items	-	5
Operating expenses
Disposals, acquisitions and related costs	(48)	(79)
Restructuring and other related costs	3	30
Currency translation on operating expenses notable items	-	-

1 Fair value movements on non-qualifying hedges in HSBC Holdings.

Reported profit

Reported profit before tax of $8.5bn was $0.8bn higher than in 3Q23. This primarily reflected an increase in revenue from a strong performance in Wealth in WPB and higher revenue in Global Foreign Exchange, Equities and Global Debt Markets in GBM, which mitigated a reduction in NII.

Revenue also benefited from a net favourable impact from notable items. These included disposal losses in 3Q23 of $0.6bn relating to repositioning and risk management, partly offset by the adverse effects of a $0.2bn gain in 3Q23 on foreign exchange hedges relating to the disposal of our banking business in Canada, which did not recur. In 3Q24, these included a $0.3bn loss on the early redemption of legacy securities. In addition, revenue in 3Q24 included a loss of $0.1bn from Treasury repositioning and risk management.

The rise in revenue was partly offset by higher reported operating expenses due to higher spend and investment in technology, as well as from inflationary pressures.

Reported profit after tax of $6.7bn was $0.5bn higher than in 3Q23.

Reported revenue

Reported revenue of $17.0bn was $0.8bn or 5% higher than in 3Q23 reflecting higher wealth revenue in WPB, notably from a strong performance in life insurance, Global Private Banking and investment distribution, as well as revenue growth in Global Foreign Exchange, Equities and Global Debt Markets in GBM, as increased market volatility led to higher client activity. These factors were partly offset by a loss of $0.1bn in 3Q24 from Treasury repositioning and risk management, and the impact of our disposals in Canada and France. The increase in revenue also included the favourable impact from notable items described above.

NII fell by $1.6bn compared with 3Q23 and included an adverse impact of foreign currency translation differences of $0.4bn. The reduction reflected the impact of deposit migration since 3Q23 and the loss on the early redemption of legacy securities in 3Q24 of $0.3bn. The fall in NII also included $0.7bn higher funding costs associated with the redeployment of our commercial surplus into the trading book, where the associated revenue is recognised in 'net income on financial instruments held for trading or managed on a fair value basis'. These reductions were in part mitigated by higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. Banking NII of $10.6bn fell by $0.9bn, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII.

Reported ECL

Reported ECL of $1.0bn were $0.1bn lower than in 3Q23, notably due to a lower level of stage 3 charges against exposures in the commercial real estate sector in mainland China in CMB and GBM, partly offset by an increase in ECL charges of $0.2bn in WPB. ECL in 3Q24 comprised charges in CMB and GBM of $0.5bn, including against exposures in the onshore Hong Kong commercial real estate ($0.1bn) and mainland China commercial real estate sectors ($0.1bn). In WPB, ECL included charges of $0.2bn in our legal entity in Mexico, which were broadly stable compared with 2Q24, primarily related to our unsecured lending book, reflecting portfolio growth. In addition, ECL in WPB included charges in HSBC UK and our main entity in Hong Kong.

For further details of the calculation of ECL, including the measurement uncertainties and significant judgements applied to such calculations, the impact of the economic scenarios and management judgemental adjustments, see pages 51 to 58.

Reported operating expenses

Reported operating expenses of $8.1bn were $0.2bn or 2% higher. This mainly reflected higher spend and investment in technology and the impacts of inflation, while the performance-related pay accrual was broadly stable. These increases were partly offset by continued cost discipline, reductions following the completion of disposals in Canada and France and a favourable impact from foreign currency translation differences of $0.1bn.

Reported share of profit from associates and JVs

Reported share of profit from associates and joint ventures of $0.6bn was $15m or 3% higher. This included a higher share of profit from Saudi Awwal Bank ('SAB').

Tax expense

Tax in 3Q24 was a charge of $1.7bn, representing an effective tax rate of 20.4%. The effective tax rate for 3Q24 was increased by provisions for uncertain tax positions and a tax charge arising under the Global Minimum Tax regime. Tax in 3Q23 was a charge of $1.4bn, representing an effective tax rate of 18.8%.

Third interim dividend for 2024

On 29 October 2024, the Board announced a third interim dividend for 2024 of $0.10 per ordinary share. For further details, see page 66.

3Q24 compared with 3Q23 - constant currency basis

Movement in profit before tax compared with 3Q23 - on a constant currency basis
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	16,998	15,887	1,111	7	(806)
ECL	(986)	(1,038)	52	5	19
Operating expenses	(8,143)	(7,823)	(320)	(4)	336
Share of profit from associates and JVs	607	598	9	2	-
Profit before tax	8,476	7,624	852	11	(451)

1 For details, see 'Strategic transactions supplementary analysis' on page 36.

Profit before tax of $8.5bn was $0.9bn higher than in 3Q23, on a constant currency basis, as growth in revenue was partly offset by higher operating expenses.

Revenue increased by $1.1bn or 7% on a constant currency basis, and included a reduction of $0.8bn relating to the impact of strategic transactions. Revenue growth was driven by Wealth in WPB and in Global Foreign Exchange, Equities and Global Debt Markets in GBM. A reduction in NII reflected deposit migration, a loss on the early redemption of legacy securities in 3Q24, and higher funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in 'net income on financial instruments held for trading or managed on a fair value basis'. Banking NII fell by $0.5bn, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII.

ECL charges of $1.0bn were $0.1bn lower on a constant currency basis, notably reflecting a reduction in charges relating to exposures in the commercial real estate sector in mainland China in CMB and GBM, partly offset by higher charges in WPB. ECL in 3Q24 included charges against exposures in the onshore Hong Kong commercial real estate sector of $0.1bn and in the mainland China commercial real estate sector of $0.1bn. In addition, WPB included charges in our legal entity in Mexico, which were broadly stable compared with 2Q24, primarily in our unsecured lending book, reflecting portfolio growth, and higher charges in HSBC UK and our main entity in Hong Kong.

Operating expenses increased by $0.3bn or 4% on a constant currency basis, mainly driven by continued spend and investment in technology and the impacts of inflation, while the performance-related pay accrual was broadly stable. These increases were partly offset by continued cost discipline and reductions following the completion of disposals in Canada and France. Target basis operating expenses were $0.4bn or 5% higher than in 3Q23, while they fell by 1% compared with 2Q24, mainly due to a reduction in marketing costs and a lower performance-related pay accrual.

9M24 compared with 9M23 - reported results

Movement in reported profit compared with 9M23
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	54,290	53,037	1,253	2	(901)
ECL	(2,052)	(2,416)	364	15	52
Operating expenses	(24,439)	(23,425)	(1,014)	(4)	723
Share of profit from associates and JVs less impairment	2,233	2,175	58	3	-
Profit before tax	30,032	29,371	661	2	(126)
Tax expense	(5,618)	(5,034)	(584)	(12)
Profit after tax	24,414	24,337	77	-

1 For details, see 'Strategic transactions supplementary analysis' on page 36.

Notable items
	Nine months ended
	30 Sep 2024	30 Sep 2023
	$m	$m
Revenue
Disposals, acquisitions and related costs	3,643	3,631
Fair value movements on financial instruments¹	-	15
Disposal losses on Markets Treasury repositioning	-	(578)
Early redemption of legacy securities	(283)
Currency translation on revenue notable items	-	96
Operating expenses
Disposals, acquisitions and related costs	(149)	(197)
Restructuring and other related costs	22	77
Currency translation on operating expenses notable items	-	-

1 Fair value movements on non-qualifying hedges in HSBC Holdings.

Reported profit

Reported profit before tax of $30.0bn was $0.7bn or 2% higher reflecting revenue growth and lower ECL, partly offset by higher operating expenses. The growth in revenue included a net favourable impact of notable items. These primarily comprised the disposal of our banking business in Canada, recognising a gain of $4.8bn, inclusive of fair value gains on related hedging and recycling of related reserves. This was partly offset by a $1.2bn impairment following the classification of our business in Argentina as held for sale, the impact of a $2.1bn reversal in 9M23 of an impairment relating to the sale of our retail banking operations in France, and a $1.6bn gain recognised on the acquisition of SVB UK in 9M23.

In addition, notable items included a $0.3bn loss in 9M24 related to the early redemption of legacy securities, while 9M23 included disposal losses of $0.6bn relating to Treasury repositioning and risk management.

Reported profit after tax of $24.4bn was $0.1bn higher than in 9M23.

Reported revenue

Reported revenue of $54.3bn was $1.3bn or 2% higher, which included a net favourable impact of $0.3bn of notable items described above.

The growth in revenue also reflected the impact of higher customer activity across our Wealth products in WPB, while in Equities and Securities Financing in GBM market volatility led to higher client activity.

NII of $24.5bn fell by $3.0bn, and included the adverse impact of foreign currency translation differences of $1.0bn and the impact from the early redemption of legacy securities of $0.3bn. The reduction included the effects of our business disposals in Canada and France. The fall in NII also reflected the impact of deposit migration and an increase of $2.5bn in funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in 'net income on financial instruments held for trading or managed on a fair value basis'. These reductions were in part mitigated by higher NII in Markets Treasury due to reinvestments in our portfolio at higher yields. Banking NII of $32.8bn fell by $0.5bn or 2%, as increased deployment of our commercial surplus to the trading book only partly mitigated the reductions in NII.

Reported ECL

Reported ECL charges of $2.1bn were $0.4bn lower. This included lower stage 3 charges, notably reflecting a reduction in charges relating to the commercial real estate sector in mainland China, which contributed to lower ECL in both CMB and GBM, and lower charges in CMB in HSBC UK. ECL in GBM also benefited from a release of stage 3 allowances in HSBC Bank plc related to a single client. These reductions were partly offset by higher charges in WPB, mainly in our legal entity in Mexico, reflecting growth in our unsecured lending portfolio and unemployment trends.

Reported operating expenses

Reported operating expenses of $24.4bn were $1.0bn or 4% higher, including favourable foreign currency translation differences between the periods of $0.4bn. The increase reflected higher spend and investment in technology, inflationary impacts and a higher performance-related pay accrual, which reflects a change in the phasing relative to 9M23, the non-recurrence of a $0.2bn impact from the reversal of historical asset impairments in 9M23, and higher bank levies in 9M24.

These factors were partly offset by the impact of disposals in Canada and France, continued cost discipline and favourable foreign currency translation differences between the periods of $0.4bn.

The number of employees expressed in full-time equivalent staff ('FTE') at 30 September 2024 was 215,180, a decrease of 5,681 compared with 31 December 2023, primarily reflecting the completion of the sale of our banking business in Canada and our retail banking operations in France. The number of contractors at 30 September 2024 was 4,453, a decrease of 223.

Reported share of profit from associates and JVs

Reported share of profit from associates and joint ventures of $2.2bn was $0.1bn higher. This included an increase in the share of profit from SAB.

Tax expense

Tax in 9M24 was a charge of $5.6bn, representing an effective tax rate of 18.7%. The effective tax rate for 9M24 was reduced by the non-taxable gain on the sale of our banking business in Canada and increased by the non-deductible loss recorded on the planned sale of our business in Argentina. Excluding these items, the effective rate for 9M24 was 21.1%. Tax in 9M23 was a charge of $5.0bn, representing an effective tax rate of 17.1%. The effective tax rate for 9M23 was reduced by 1.5 percentage points by the non-taxable provisional gain on the acquisition of SVB UK and by 1.4 percentage points by the release of provisions for uncertain tax positions.

9M24 compared with 9M23 - constant currency basis

Movement in profit before tax compared with 9M23 - on a constant currency basis
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	54,290	52,389	1,901	4	(978)
ECL	(2,052)	(2,355)	303	13	52
Operating expenses	(24,439)	(23,067)	(1,372)	(6)	717
Share of profit from associates and JVs less impairment	2,233	2,128	105	5	-
Profit before tax	30,032	29,095	937	3	(209)

1 For details, see 'Strategic transactions supplementary analysis' on page 36.

Profit before tax of $30.0bn was $0.9bn higher than in 9M23 on a constant currency basis. Constant currency profit before tax excluding notable items of $26.8bn was $0.7bn or 3% higher.

Revenue increased by $1.9bn or 4% on a constant currency basis, and included a $1.0bn adverse impact from strategic transactions. The growth in revenue reflected the impact of higher customer activity in our Wealth products in WPB, and in Equities and Securities Financing in GBM. NII fell due to business disposals, deposit migration and a loss on the early redemption of legacy securities in 3Q24. The reduction also included higher funding costs associated with the redeployment of our commercial surplus into the trading book, where the related revenue is recognised in 'net income on financial instruments held for trading or managed on a fair value basis'. On a constant currency basis, banking NII increased by $0.5bn or 1%.

ECL charges were $0.3bn lower on a constant currency basis, primarily due to a reduction in stage 3 charges in relation to exposures in the commercial real estate sector in mainland China which contributed to lower ECL in both CMB and GBM, and lower charges in CMB in HSBC UK. These reductions were partly offset by higher charges in WPB reflecting growth in unsecured lending in our legal entity in Mexico and unemployment trends.

Operating expenses increased by $1.4bn or 6% on a constant currency basis, primarily reflecting higher spend and investment in technology, inflationary impacts and a higher performance-related pay accrual, partly offset by continued cost discipline. Target basis operating expenses rose by $1.4bn or 6% compared with 9M23.

Net interest income

	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
	$m	$m	$m	$m	$m
Interest income	82,627	74,154	27,255	27,107	27,198
Interest expense	(58,079)	(46,642)	(19,618)	(18,849)	(17,950)
Net interest income	24,548	27,512	7,637	8,258	9,248
Average interest-earning assets	2,094,585	2,160,881	2,088,100	2,055,283	2,157,370
	%	%	%	%	%
Gross interest yield¹	5.27	4.59	5.19	5.30	5.00
Less: gross interest payable¹	(4.08)	(3.35)	(4.07)	(4.05)	(3.80)
Net interest spread²	1.19	1.24	1.12	1.25	1.20
Net interest margin³	1.57	1.70	1.46	1.62	1.70

1 Gross interest yield is the average annualised interest rate earned on average interest-earning assets ('AIEA'). Gross interest payable is the average annualised interest cost as a percentage of average interest-bearing liabilities ('AIBL').

2 Net interest spread is the difference between the average annualised interest rate earned on AIEA, net of amortised premiums and loan fees, and the average annualised interest rate payable on average interest-bearing funds.

3 Net interest margin is net interest income expressed as an annualised percentage of AIEA.

Net interest income

NII for 9M24 was $24.5bn, a decrease of $3bn or 11% compared with 9M23. The reduction was mainly due to the deployment of commercial surplus into the trading book, for which the associated revenue is reported in 'net income on financial instruments held for trading or managed on a fair value basis'. The fall also reflected business disposals, a $0.3bn loss in 9M24 related to the early redemption of legacy securities, and a reduction of $0.2bn reflecting a reclassification made in 4Q23 of cash flow hedge revenue between NII and non-NII. These decreases were partly offset by growth in HSBC UK due to improved margins and the acquisition of SVB UK in 1Q23. Excluding the unfavourable impact of foreign currency translation differences, NII decreased by $2bn or 8%.

NII for 3Q24 was $7.6bn, down 17% compared with 3Q23, and down 9% compared with 2Q24. The year-on-year decline was driven by a rise in the interest expense of average interest-bearing liabilities ('AIBL') due to higher interest rates. The decline against 2Q24 reflected a rise in the interest expense related to AIBL, which included a $0.3bn adverse impact from the early redemption of legacy securities.

Net interest margin

NIM for 9M24 of 1.57% was 13 basis points ('bps') lower compared with 9M23, reflecting a higher interest expense related to AIBL, including the impact of deposit migration, the increased deployment of our commercial surplus to the trading book, and the $0.3bn loss on the early redemption of legacy securities. These reductions were mitigated by an increase in gross asset yields due to higher interest rates. Excluding the adverse effect of foreign currency translation differences, NIM declined by 12bps.

NIM for 3Q24 was 1.46%, 24bps lower year-on-year, and down 16bps compared with the previous quarter, primarily reflecting the impact of higher interest expense related to AIBL, the early redemption of legacy securities and the impact of deployment of our commercial surplus to the trading book.

Interest income and interest expense

Interest income for 9M24 of $82.6bn increased by $8.5bn compared with 9M23, primarily due to higher asset yields. Excluding the adverse effect of foreign currency translation differences of $1.7bn, interest income increased by $10.2bn.

Interest income of $27.3bn in 3Q24 was up $0.1bn compared with both 3Q23 and 2Q24.

Interest expense for 9M24 of $58.1bn increased by $11.4bn or 24% compared with 9M23. This was primarily driven by a rise in interest rates, deposit migration and the impact of the early redemption of legacy securities of $0.3bn. Excluding the favourable effects of foreign currency translation differences of $0.8bn, interest expense increased by $12.2bn.

Interest expense of $19.6bn in 3Q24 was up $1.7bn compared with 3Q23, and $0.8bn higher compared with 2Q24. The increase compared with 3Q23 was mainly driven by deposit migration and the impact of the early redemption of legacy securities. The increase compared with 2Q24 was driven by an increase in AIBL and the impact of the early redemption of legacy securities.

Banking net interest income

Banking NII is an alternative performance measure, and is defined as Group NII after deducting:

- the internal cost to fund trading and fair value net assets for which associated revenue is reported in 'Net income from financial instruments held for trading or managed on a fair value basis', also referred to as 'trading and fair value income'. These funding costs reflect proxy overnight or term interest rates as applied by internal funds transfer pricing;

- the funding costs of foreign exchange swaps in Markets Treasury, where an offsetting income or loss is recorded in trading and fair value income. These instruments are used to manage foreign currency deployment and funding in our entities; and

- third-party NII in our insurance business.

In our segmental disclosures, the funding costs of trading and fair value net assets are predominantly recorded in GBM in 'net income from financial instruments held for trading or managed on a fair value basis'. On consolidation, this funding is eliminated in Corporate Centre, resulting in an increase in the funding costs reported in NII with an equivalent offsetting increase in 'net income from financial instruments held for trading or managed on a fair value basis' in this segment. In the consolidated Group results, the cost to fund these trading and fair value net assets is reported in NII.

Banking NII was $32.8bn in 9M24. The funding costs associated with generating trading and fair value income were $8.6bn, an increase of $2.5bn compared with 9M23, primarily reflecting growth in net trading and fair value assets. Banking NII also deducts third-party NII related to our insurance business, which was $0.3bn, broadly stable compared with 9M23. The movement in banking NII also included a $0.3bn loss in 9M24 related to the early redemption of legacy securities and a reduction of $0.2bn reflecting a reclassification made in 4Q23 of cash flow hedge revenue between NII and non-NII.

The internally allocated funding to generate trading and fair value income was approximately $210bn at 30 September 2024, a rise of approximately $80bn since 30 September 2023, and an increase of approximately $2bn since 30 June 2024. This relates to trading, fair value and associated net asset balances predominantly in GBM. The increase reflected management decisions on the deployment of our commercial surplus.

Banking net interest income
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
	$bn	$bn	$bn	$bn	$bn
Net interest income	24.5	27.5	7.6	8.2	9.2
Banking book funding costs used to generate 'net income from financial instruments held for trading or managed on a fair value basis'	8.6	6.1	3.1	2.8	2.4
Third-party net interest income from insurance	(0.3)	(0.3)	(0.1)	(0.1)	(0.1)
Banking net interest income	32.8	33.3	10.6	10.9	11.5
- of which:
The Hongkong and Shanghai Banking Corporation Limited	16.2	16.5	5.5	5.3	5.8
HSBC UK Bank plc	7.7	7.2	2.6	2.5	2.5
HSBC Bank plc	3.4	3.4	1.2	1.2	1.2

Summary consolidated balance sheet

	At
	30 Sep 2024	30 Jun 2024	31 Dec 2023
	$m	$m	$m
Assets
Cash and balances at central banks	252,310	277,112	285,868
Trading assets	349,904	331,307	289,159
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss	126,372	117,014	110,643
Derivatives	232,439	219,269	229,714
Loans and advances to banks	117,514	102,057	112,902
Loans and advances to customers	968,653	938,257	938,535
Reverse repurchase agreements - non-trading	263,387	230,189	252,217
Financial investments	490,503	467,356	442,763
Assets held for sale	9,182	5,821	114,134
Other assets	288,357	286,621	262,742
Total assets	3,098,621	2,975,003	3,038,677
Liabilities
Deposits by banks	89,337	82,435	73,163
Customer accounts	1,660,715	1,593,834	1,611,647
Repurchase agreements - non-trading	202,510	202,770	172,100
Trading liabilities	75,917	77,455	73,150
Financial liabilities designated at fair value	146,600	140,800	141,426
Derivatives	239,836	217,096	234,772
Debt securities in issue	103,414	98,158	93,917
Insurance contract liabilities	133,155	125,252	120,851
Liabilities of disposal groups held for sale	8,202	5,041	108,406
Other liabilities	238,910	241,748	216,635
Total liabilities	2,898,596	2,784,589	2,846,067
Equity
Total shareholders' equity	192,754	183,293	185,329
Non-controlling interests	7,271	7,121	7,281
Total equity	200,025	190,414	192,610
Total liabilities and equity	3,098,621	2,975,003	3,038,677

Balance sheet commentary

Balance sheet - 30 September 2024 compared with 30 June 2024

At 30 September 2024, our total assets of $3.1tn were $124bn higher on a reported basis and included favourable effects of foreign currency translation differences of $85bn. On a constant currency basis, total assets were $39bn higher, driven by an increase in reverse repurchase agreements, growth in loans and advances to banks, and higher financial investments balances. These were partly offset by lower cash and balances at central banks.

Loans and advances to customers as a percentage of customer accounts were 58.3%, compared with 58.9% at 30 June 2024.

Combined view of customer lending and customer deposits
	At
	30 Sep 2024	30 Jun 2024	31 Dec 2023
	$m	$m	$m
Loans and advances to customers	968,653	938,257	938,535
Loans and advances to customers of disposal groups reported in 'Assets held for sale'	2,693	2,253	73,285
- banking business in Canada	-	-	56,129
- retail banking operations in France	-	-	16,902
- business in Argentina	1,913	1,559
- operations in Armenia	438	478	-
- private banking business in Germany	326	-
- other	15	216	254
Non-current assets held for sale	161	160	92
Combined customer lending	971,507	940,670	1,011,912
Currency translation	-	28,254	13,722
Combined customer lending at constant currency	971,507	968,924	1,025,633
Customer accounts	1,660,715	1,593,834	1,611,647
Customer accounts reported in 'Liabilities of disposal groups held for sale'	7,140	4,037	85,950
- banking business in Canada	-	-	63,001
- retail banking operations in France	-	-	22,307
- business in Argentina	3,902	3,077
- operations in Armenia	440	457	-
- private banking business in Germany	2,679	-
- other	119	503	643
Combined customer deposits	1,667,855	1,597,871	1,697,597
Currency translation	-	47,020	24,339
Combined customer deposits at constant currency	1,667,855	1,644,891	1,721,936

Loans and advances to customers

Loans and advances to customers of $1.0tn were $30bn higher on a reported basis. This included favourable effects of foreign currency translation differences of $28bn, mainly in HSBC UK. Excluding foreign currency translation differences, customer lending balances increased by $2bn. The increase primarily reflected growth in WPB, notably in HSBC UK, and in CMB, partly offset by a reduction in GBM.

In WPB, customer lending increased by $3bn. This was driven by continued growth in mortgage lending balances, notably in HSBC UK and our legal entity in the US.

In CMB, customer lending increased by $3bn. This was driven by growth in term lending in HSBC UK, HSBC Bank plc and in our legal entities in the Middle East, Australia, Mexico, Singapore and India. This was partly offset by lower term lending balances in our legal entities in Hong Kong and the US.

In GBM, lending decreased by $4bn, primarily reflecting lower term lending, notably in our main legal entities in Hong Kong, Singapore, the US and mainland China, as well as in HSBC Bank plc. This was partly offset by growth in overdraft balances in our main legal entity in Hong Kong, as well as in HSBC Bank plc and the US.

We continue to expect mid-single digit annual percentage customer lending growth over the medium to long term.

Customer accounts

Customer accounts of $1.7tn increased by $67bn on a reported basis. This included favourable effects of foreign currency translation differences of $47bn, mainly in HSBC UK. Excluding foreign currency translation differences, customer accounts rose by $20bn.

In WPB, customer accounts rose by $15bn, primarily in our legal entity in Hong Kong reflecting an increase in term deposits prior to interest rate reductions and short-term inflows into customer accounts amid equity market volatility. This increase was partly offset by a decrease in HSBC Bank plc, notably reflecting the reclassification of deposit balances associated with the planned sale of our private banking business in Germany.

In CMB, the increase in customer accounts of $6bn reflected balance growth in our main legal entities in the US and Hong Kong. In addition, 3Q24 included short-term deposits in HSBC UK and our legal entity in the US, which were subsequently withdrawn in early October.

In GBM, customer accounts remained broadly stable as a reduction in HSBC Bank plc reflecting the withdrawal of a short-term deposit held at 30 June 2024 was mostly offset by balance growth, notably in our legal entities in mainland China and the US.

Financial investments

As part of our interest rate hedging strategy, we hold a portfolio of debt instruments, reported within financial investments, which are classified as hold-to-collect-and-sell. As a result, the change in value of these instruments is recognised through 'debt instruments at fair value through other comprehensive income' in equity.

At 30 September 2024, we had recognised a pre-tax cumulative unrealised loss reserve through other comprehensive income of $2.3bn related to these hold-to-collect-and-sell positions, excluding investments held in our insurance business. This reflected a $1.9bn pre-tax gain in 3Q24, inclusive of movements on related fair value hedges. During 3Q24, we recognised a loss of $0.1bn in the income statement in relation to Treasury repositioning and risk management actions in this portfolio. Overall, the Group is positively exposed to rising interest rates through NII, although there is an adverse impact on our capital base in the early stages of a rising interest rate environment due to the fair value of hold-to-collect-and-sell instruments. Over time, these adverse movements will unwind as the instruments reach maturity, although not all will necessarily be held to maturity, or as interest rates begin to fall.

We also hold a portfolio of financial investments measured at amortised cost, which are classified as hold-to-collect. At 30 September 2024, the debt instruments within this portfolio, excluding those held in our insurance business, that are held to manage our interest rate exposure had a fair value broadly in line with their carrying value, representing a $2.2bn improvement during 3Q24.

Bank of Communications Co., Limited

On 24 September 2024, the People's Bank of China, National Financial Regulatory Administration and China Securities Regulatory Commission announced several policies aimed at promoting growth and economic development. These included monetary stimulus, property market support and capital market strengthening measures, as well as measures to recapitalise the largest commercial banks. We are monitoring these developments and their potential impacts, including on the carrying value of our stake in the Bank of Communications Co., Limited ('BoCom'). The range of possible outcomes, including the possible impact of the announced measures, remains broad and uncertain and could impact on our ongoing impairment assessments. These developments may have the potential to have a significant impact on the Group's reported earnings, but would be expected to have an immaterial impact on HSBC's capital, capital ratios and its distribution capability. As at 30 September 2024, the carrying value of the investment was $22.7bn (30 June 2024: $22.1bn), and its fair value was $10.8bn (30 June 2024: $11.1bn), with no additional impairment recognised during the quarter. At 31 December 2023, we recognised an impairment of $3bn against the carrying value of our investment in BoCom, which had no material impact on HSBC's capital, capital ratios and no impact on 2023 dividends or share buy-backs.

Risk-weighted assets - 30 September 2024 compared with 30 June 2024

Risk-weighted assets ('RWAs') increased by $28.8bn during 3Q24. Excluding an increase of $14.8bn from foreign currency translation differences, RWAs rose by $14.0bn, largely as a result of:

- an $11.8bn increase primarily driven by a rise in corporate exposures, notably in HSBC UK Bank plc, SAB and Asia, and higher sovereign exposures, mainly in Asia. Additionally, there was a rise in securities financing exposures in counterparty credit risk, notably in HSBC Bank plc; and

- a $4.2bn increase mainly from unfavourable credit risk rating migrations in Asia, including in the Hong Kong commercial real estate sector, and the US.

These increases were partly offset by:

- a $1.1bn decline primarily due to a $2.2bn change to the financial institutions model and a $0.8bn decrease due to credit risk parameter refinements, offset by methodology changes notably in Asia, HSBC UK Bank plc and the US.

Global businesses

Wealth and Personal Banking - constant currency basis

Results - on a constant currency basis
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	21,723	22,678	(955)	(4)	(2,671)
ECL	(926)	(692)	(234)	(34)	11
Operating expenses	(11,156)	(10,629)	(527)	(5)	574
Share of profit/(loss) from associates and JVs	43	46	(3)	(7)	-
Profit before tax	9,684	11,403	(1,719)	(15)	(2,086)

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Nine months ended
	30 Sep 2024	30 Sep 2023	Variance
			9M24 vs. 9M23
					of which strategic transactions⁴
	$m	$m	$m	%	$m
Wealth	6,696	5,772	924	16	(153)
- investment distribution	2,198	1,955	243	12	(116)
- Global Private Banking	1,996	1,729	267	15	-
net interest income	895	885	10	1	-
non-interest income	1,101	844	257	30	-
- life insurance	1,474	1,150	324	28	-
- asset management	1,028	938	90	10	(37)
Personal Banking	14,559	15,362	(803)	(5)	(496)
- net interest income	13,521	14,400	(879)	(6)	(426)
- non-interest income	1,038	962	76	8	(70)
Other¹	468	1,544	(1,076)	(70)	(2,022)
- of which: impairment (loss)/reversal relating to the sale of our retail banking operations in France	55	2,058	(2,003)	(97)	(2,003)
Net operating income²	21,723	22,678	(955)	(4)	(2,671)
RoTE (annualised)³ (%)	30.4	37.3

1 'Other' includes Markets Treasury, HSBC Holdings interest expense and hyperinflation. It also includes the distribution and manufacturing (where applicable) of retail and credit protection insurance, disposal gains and other non-product-specific income.

2 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

3 RoTE (annualised) in 9M23 included a 6.6 percentage point favourable impact from the reversal of the impairment losses relating to the sale of our retail banking operations in France.

4 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Notable items
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Sep 2023
	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs	55	2,034	-	-
Disposal losses on Markets Treasury repositioning	-	(253)	-	(253)
Currency translation on revenue notable items	-	21	-	(3)
Operating expenses
Disposals, acquisitions and related costs	-	(26)	-	(3)
Restructuring and other related costs	5	16	1	16
Currency translation on operating expenses notable items	-	-	-	-

9M24 compared with 9M23

Profit before tax of $9.7bn was $1.7bn lower than in 9M23 on a constant currency basis. The reduction was due to the non-recurrence of a $2.1bn reversal in 9M23 of an impairment relating to the sale of our retail banking operations in France, although it was subsequently reinstated in 4Q23 and the sale completed on 1 January 2024. In addition, the decrease reflected a $0.2bn reduction due to the sale of our banking business in Canada, which completed in 1Q24. NII was stable compared with 9M23, while fee income increased by 10%. Operating expenses grew by $0.5bn and there was an increase in ECL of $0.2bn.

Revenue of $21.7bn was $1.0bn or 4% lower on a constant currency basis. This included the impact of a reversal of an impairment relating to the sale of our retail banking operations in France included within 'Other'. Wealth performed strongly, up $0.9bn, as we continued to execute on our strategy. This included double-digit percentage growth in life insurance, Global Private Banking, investment distribution and asset management. This was partly offset by a reduction in Personal Banking NII of $0.9bn, due to the impact of the disposals in France and Canada mentioned above and margin compression due to lower interest rates, partly offset by balance sheet and non-NII growth.

In Wealth, revenue of $6.7bn was up $0.9bn or 16%.

- Global Private Banking revenue was $0.3bn or 15% higher, driven by a strong performance in brokerage and trading in our entities in Asia.

- Investment distribution revenue grew by $0.2bn, or 12%, driven by higher sales of mutual funds, structured products and bonds due to our continued investment in Wealth and improved market sentiment, notably in our entities in Asia.

- Asset management revenue was $0.1bn or 10% higher, driven by an increase in assets under management due to inflows and positive market movements. This was partly offset by a reduction in revenue due to the sale of our banking business in Canada.

- Life insurance revenue was $0.3bn or 28% higher. The growth included an increase in earnings from contractual service margin ('CSM') release, largely due to continued growth in the CSM balance. The year-on-year increase in revenue also included the impact of corrections to historical valuation estimates in 9M23. Insurance manufacturing new business CSM of $2.1bn was 58% higher than in 9M23, mainly in our legal entities in Hong Kong.

In Personal Banking, revenue of $14.6bn was down $0.8bn or 5%.

- Net interest income was $0.9bn or 6% lower due to the impact of the sales in France and Canada and narrower margins. Compared with 9M23, lending balances fell by $14bn due to the sale of our retail banking operations in France, which was a $25bn reduction with $8bn retained in Corporate Centre. Mortgage lending balances rose in HSBC UK and our legal entity in the US. Unsecured lending balances increased, notably in HSBC UK and our legal entities in Asia. Deposit balances fell by $2bn, mainly due to the sale of our retail banking operations in France (down $24bn), partly offset by growth in our main legal entities in Hong Kong and mainland China.

Other revenue decreased by $1.1bn, mainly due to the non-recurrence of a $2.1bn reversal in 9M23 of an impairment relating to the sale of our retail banking operations in France. This was partly offset by a $0.6bn increase in revenue allocated from Markets Treasury, the non-recurrence of a loss on sale of our business in New Zealand in 9M23 of $0.1bn and higher interest income earned on own capital.

ECL were $0.9bn, an increase of $0.2bn compared with 9M23 on a constant currency basis, reflecting higher charges in our legal entity in Mexico, mainly in our unsecured portfolio, due to portfolio growth and unemployment trends.

Operating expenses of $11.2bn were 5% higher on a constant currency basis, reflecting continued investments in Wealth in Asia, higher spend and investment in technology, a higher performance-related pay accrual, and from the impact of inflation. These were partly offset by continued cost discipline and the impact of the disposals in France and Canada.

3Q24 compared with 3Q23

Results - on a constant currency basis
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	7,411	6,584	827	13	(283)
ECL	(450)	(208)	(242)	>(100)	6
Operating expenses	(3,750)	(3,609)	(141)	(4)	212
Share of profit/(loss) from associates and JVs	15	11	4	36	-
Profit before tax	3,226	2,778	448	16	(65)

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Quarter ended
	30 Sep 2024	30 Sep 2023	Variance
			3Q24 vs. 3Q23
					of which strategic transactions³
	$m	$m	$m	%	$m
Wealth	2,360	1,882	478	25	(72)
- investment distribution	762	681	81	12	(53)
- Global Private Banking	669	581	88	15	-
net interest income	297	299	(2)	(1)	-
non-interest income	372	282	90	32	-
- life insurance	562	299	263	88	-
- asset management	367	321	46	14	(19)
Personal Banking	4,870	5,201	(331)	(6)	(238)
- net interest income	4,519	4,892	(373)	(8)	(210)
- non-interest income	351	309	42	14	(28)
Other¹	181	(499)	680	>100	27
- of which: impairment (loss)/reversal relating to the sale of our retail banking operations in France	-	-	-
Net operating income²	7,411	6,584	827	13	(283)

2 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

3 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Profit before tax of $3.2bn was $0.4bn higher than in 3Q23 on a constant currency basis, primarily reflecting a strong revenue performance, up $0.8bn on a constant currency basis. This included the adverse impact of strategic transactions of $0.3bn. In Wealth, revenue increased by 25%, with double-digit growth in all products. This was partly offset by a decrease in Personal Banking income of $0.3bn, mainly due to the $0.2bn impact of the disposals in France and Canada. ECL of $0.5bn were $0.2bn higher compared with 3Q23 on a constant currency basis, mainly driven by releases due to improvements in macroeconomic scenarios in 3Q23, primarily in HSBC UK, and portfolio growth in our legal entities in Mexico and Hong Kong. Operating expenses of $3.8bn were $0.1bn or 4% higher on a constant currency basis, mainly due to continued investment in Wealth in Asia, higher spend and investment in technology, and inflationary pressures, which were in part mitigated by continued cost discipline and the impact of the disposals in France and Canada.

Commercial Banking - constant currency basis

Results - on a constant currency basis
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	16,284	17,378	(1,094)	(6)	(1,932)
ECL	(1,041)	(1,356)	315	23	47
Operating expenses	(5,780)	(5,291)	(489)	(9)	103
Share of profit/(loss) from associates and JVs	1	(1)	2	>100	-
Profit before tax	9,464	10,730	(1,266)	(12)	(1,782)

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions⁵
	$m	$m	$m	%	$m
Global Trade Solutions	1,479	1,501	(22)	(1)	(24)
Credit and Lending	3,957	4,005	(48)	(1)	(158)
Global Payments Solutions	8,962	8,988	(26)	-	(115)
GBM products, Insurance and Investments, and Other¹	1,886	2,884	(998)	(35)	(1,635)
- of which: share of revenue from Markets and Securities Services and Banking products	1,014	977	37	4
- of which: gain on the acquisition of Silicon Valley Bank UK Limited	-	1,661	(1,661)	(100)	(1,661)
Net operating income²	16,284	17,378	(1,094)	(6)	(1,932)
- of which: transaction banking³	11,177	11,223	(46)	-
RoTE (annualised)⁴ (%)	21.1	25.8

1 Includes a gain on the acquisition of SVB UK and CMB's share of revenue from the sale of Markets and Securities Services ('MSS') and Banking products to CMB customers. GBM's share of revenue from the sale of these products to CMB customers is included within the corresponding lines of the GBM management view of revenue. Also includes allocated revenue from Markets Treasury, HSBC Holdings interest expense and hyperinflation.

2 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

3 Transaction banking comprises Global Trade Solutions ('GTS'), GPS and CMB's share of Global Foreign Exchange (shown within 'share of revenue from Markets and Securities Services and Banking products').

4 RoTE (annualised) in 9M23 included a 4.3 percentage point favourable impact from the provisional gain on the acquisition of SVB UK.

5 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Notable items
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Sep 2023
	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs	-	1,593	-	86
Disposal losses on Markets Treasury repositioning	-	(190)	-	(190)
Currency translation on revenue notable items	-	65	-	-
Operating expenses
Disposals, acquisitions and related costs	2	(30)	-	(15)
Restructuring and other related costs	3	30	-	1
Currency translation on operating expenses notable items	-	-	-	-

9M24 compared with 9M23

Profit before tax of $9.5bn was $1.3bn lower than in 9M23 on a constant currency basis. This was largely due to a reduction in revenue following the non-recurrence of a $1.7bn gain recognised in 9M23 on the acquisition of SVB UK, the impact of the disposal of our banking business in Canada, as well as higher operating expenses. The reduction in profit before tax was partly offset by lower ECL.

Revenue of $16.3bn was $1.1bn or 6% lower on a constant currency basis. This was primarily due to the non-recurrence of a $1.7bn gain recognised in 9M23 on the acquisition of SVB UK. It also included an adverse impact of $0.3bn from strategic transactions, notably in relation to the disposal of our banking business in Canada. These were partly offset by an increase in NII due to the higher interest rate environment, growth in transaction banking fee income and higher revenue from currency volatility in Argentina.

- In GTS, revenue was down $22m or 1%, mainly due to the impact of the disposal of our banking business in Canada, as well as the impacts of the softer trade cycle, which notably resulted in lower revenue in our legal entity in Hong Kong. This was partly offset by growth in transaction banking fee income.

- In Credit and Lending, revenue decreased by $48m or 1%, due to the impact of the disposal of our banking business in Canada and lower balances reflecting muted demand from customers, notably in our legal entities in Asia.

- In GPS, revenue was down $26m or 0.3%, reflecting the impact of the disposal of our banking business in Canada, and a decrease in our main legal entities in Asia driven by lower margins. This was partly offset by a 1% increase in fee income resulting from business initiatives, repricing and transaction growth, particularly in international payments. There was also higher revenue in our entity in Argentina due to currency volatility.

- In GBM products, Insurance and Investments, and Other, revenue decreased by $1.0bn, largely due to the non-recurrence of a $1.7bn gain recognised in 9M23 on the acquisition of SVB UK. These adverse impacts were partly offset by higher revenue from Markets Treasury and interest income on own capital and higher GBM collaboration revenue.

ECL charges of $1.0bn were $0.3bn lower than in 9M23 on a constant currency basis. The charge in 9M24 reflected lower charges in our legal entities in Asia and the UK, and lower charges related to the commercial real estate sector in mainland China. These reductions were partly offset by new stage 3 charges in our legal entity in the Middle East.

Operating expenses of $5.8bn were $0.5bn or 9% higher than in 9M23 on a constant currency basis. The increase reflected currency volatility in Argentina, incremental costs in IVB following the acquisition of SVB UK, higher spend and investment in technology, and inflationary impacts. These increases were in part mitigated by continued cost discipline and the impact of the sale of our banking business in Canada.

3Q24 compared with 3Q23

	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	5,388	5,292	96	2	(311)
ECL	(468)	(662)	194	29	14
Operating expenses	(1,919)	(1,833)	(86)	(5)	88
Share of profit/(loss) from associates and JVs	-	-	-	-	-
Profit before tax	3,001	2,797	204	7	(209)

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions⁴
	$m	$m	$m	%	$m
Global Trade Solutions	509	505	4	1	(13)
Credit and Lending	1,306	1,311	(5)	-	(117)
Global Payments Solutions	2,946	3,131	(185)	(6)	(83)
GBM products, Insurance and Investments, and Other¹	627	345	282	82	(98)
- of which: share of revenue from Markets and Securities Services and Banking products	338	323	15	5
- of which: gain on the acquisition of Silicon Valley Bank UK Limited	-	89	(89)	(100)	(89)
Net operating income²	5,388	5,292	96	2	(311)
- of which: transaction banking³	3,710	3,881	(171)	(4)

1 Includes a gain on the acquisition of SVB UK and CMB's share of revenue from the sale of MSS and Banking products to CMB customers. GBM's share of revenue from the sale of these products to CMB customers is included within the corresponding lines of the GBM management view of revenue. Also includes allocated revenue from Markets Treasury, HSBC Holdings interest expense and hyperinflation.

2 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

3 Transaction banking comprises GTS, GPS and CMB's share of Global Foreign Exchange (shown within 'share of revenue from Markets and Securities Services and Banking products').

4 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Profit before tax of $3.0bn was $0.2bn or 7% higher than in 3Q23 on a constant currency basis, primarily due to lower ECL charges relating to the commercial real estate sector in mainland China. Revenue increased by $0.1bn on a constant currency basis, mainly driven by growth in transaction banking fees, an increase in Markets Treasury income and from currency volatility in Argentina. This was partly offset by a reduction in revenue due to the sale of our banking business in Canada and lower GPS revenue reflecting lower margins. Operating expenses were $0.1bn higher on a constant currency basis, mainly driven by higher spend and investment in technology, currency volatility in Argentina and inflationary impacts, partly offset by continued cost discipline and the impact of the sale of our banking business in Canada.

Global Banking and Markets - constant currency basis

Results - on a constant currency basis
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	13,154	12,154	1,000	8	(105)
ECL	(58)	(304)	246	81	(6)
Operating expenses	(7,434)	(7,180)	(254)	(4)	47
Share of profit/(loss) from associates and JVs	-	-	-	-	-
Profit before tax	5,662	4,670	992	21	(64)

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions⁶
	$m	$m	$m	%	$m
Markets and Securities Services	7,272	6,762	510	8	(36)
- Securities Services	1,700	1,748	(48)	(3)	-
- Global Debt Markets	813	750	63	8	(7)
- Global Foreign Exchange	3,028	3,076	(48)	(2)	(25)
- Equities	718	404	314	78	(1)
- Securities Financing	1,047	816	231	28	(3)
- Credit and funding valuation adjustments	(34)	(32)	(2)	(6)	(1)
Banking	6,471	6,374	97	2	(82)
- Global Trade Solutions	522	496	26	5	(8)
- Global Payments Solutions	3,364	3,287	77	2	(47)
- Credit and Lending	1,354	1,489	(135)	(9)	(11)
- Investment Banking¹	819	817	2	-	(5)
- Other²	412	285	127	45	(11)
GBM Other	(589)	(982)	393	40	13
- Principal Investments	67	14	53	>100	-
- Other³	(656)	(996)	340	34	13
Net operating income⁴	13,154	12,154	1,000	8	(105)
- of which: transaction banking⁵	8,614	8,607	7	-
RoTE (annualised) (%)	13.8	12.9

1 From 1 January 2024, we renamed 'Capital Markets and Advisory' as 'Investment Banking' to better reflect our purpose and offering.

2 Includes portfolio management, earnings on capital and other capital allocations on all Banking products.

3 Includes notional tax credits and Markets Treasury, HSBC Holdings interest expense and hyperinflation.

4 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

5 Transaction banking comprises Securities Services, Global Foreign Exchange (net of revenue shared with CMB), GTS and GPS.

6 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Notable items
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Sep 2023
	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs	(14)	-	-	-
Disposal losses on Markets Treasury repositioning	-	(135)	-	(135)
Currency translation on revenue notable items	-	(2)	-	(2)
Operating expenses
Disposals, acquisitions and related costs	-	3	-	-
Restructuring and other related costs	3	4	-	4
Currency translation on operating expenses notable items	-	-	-	-

9M24 compared with 9M23

Profit before tax of $5.7bn was $1.0bn or 21% higher than in 9M23 on a constant currency basis. This was driven by an increase in revenue of $1.0bn or 8%, notably from strong performances in Equities and Securities Financing. In addition, ECL charges decreased compared with 9M23, while operating expenses increased by $0.3bn.

Revenue of $13.2bn was $1.0bn or 8% higher on a constant currency basis.

In Markets and Securities Services ('MSS'), revenue increased by $0.5bn or 8%.

- In Securities Services, revenue decreased by $48m or 3% from divestments within our fund administration business.

- In Global Debt Markets, revenue rose by $63m or 8%, driven by emerging markets credit and structured financing as well as higher volumes in primary markets.

- In Global Foreign Exchange, revenue fell by $48m or 2% compared with a strong performance in 9M23, due to continued market volatility offset by margin compression.

- In Equities, revenue increased by $0.3bn or 78% reflecting increased client activity supported by market conditions versus a comparatively weak 9M23.

- In Securities Financing, revenue rose by $0.2bn or 28%, driven by onboarding of US Prime clients and strong demand in institutional financing.

In Banking, revenue increased by $0.1bn or 2%.

- In GPS, revenue increased by $0.1bn or 2%, driven by wider spreads and fee performance resulting from business initiatives, repricing and transaction growth.

- In Credit and Lending, revenue decreased by $0.1bn or 9% reflecting continued muted client demand.

In GBM Other, revenue increased by $0.4bn or 40% reflecting higher Markets Treasury revenue and valuation gains in Principal Investments.

ECL of $0.1bn in 9M24 decreased by $0.2bn compared with charges of $0.3bn in 9M23 on a constant currency basis. The 9M24 period included a release related to a single client.

Operating expenses of $7.4bn increased by $0.3bn or 4% on a constant currency basis, due to the impact of inflation and higher spend and investment in technology, partly mitigated by continued cost discipline.

3Q24 compared with 3Q23

Results - on a constant currency basis
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	4,412	3,833	579	15	(54)
ECL	(47)	(168)	121	72	(1)
Operating expenses	(2,516)	(2,404)	(112)	(5)	23
Share of profit/(loss) from associates and JVs	-	-	-	-	-
Profit before tax	1,849	1,261	588	47	(32)

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions⁶
	$m	$m	$m	%	$m
Markets and Securities Services	2,448	2,134	314	15	(20)
- Securities Services	564	605	(41)	(7)	-
- Global Debt Markets	259	159	100	63	(5)
- Global Foreign Exchange	1,060	909	151	17	(13)
- Equities	272	169	103	61	(1)
- Securities Financing	316	304	12	4	(2)
- Credit and funding valuation adjustments	(23)	(12)	(11)	(92)	-
Banking	2,171	2,144	27	1	(43)
- Global Trade Solutions	175	162	13	8	(4)
- Global Payments Solutions	1,118	1,114	4	-	(24)
- Credit and Lending	466	508	(42)	(8)	(5)
- Investment Banking¹	275	256	19	7	(2)
- Other²	137	104	33	32	(8)
GBM Other	(207)	(445)	238	53	9
- Principal Investments	38	1	37	>100	-
- Other³	(245)	(446)	201	45	9
Net operating income⁴	4,412	3,833	579	15	(54)
- of which: transaction banking⁵	2,917	2,790	127	5

1 From 1 January 2024, we renamed 'Capital Markets and Advisory' as 'Investment Banking' to better reflect our purpose and offering.

2 Includes portfolio management, earnings on capital and other capital allocations on all Banking products.

3 Includes notional tax credits and Markets Treasury, HSBC Holdings interest expense and hyperinflation.

4 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

5 Transaction banking comprises Securities Services, Global Foreign Exchange (net of revenue shared with CMB), GTS and GPS.

6 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Profit before tax of $1.8bn was $0.6bn or 47% higher than in 3Q23 on a constant currency basis. Revenue was $0.6bn or 15% higher on a constant currency basis, mainly from growth in Global Foreign Exchange as client-driven transactions remained elevated across Cash FX and Emerging Markets Rates. Global Debt Markets also increased, from strong primary issuances driving client flow across developed and emerging markets, as well as higher revenue from secondary trading, and Equities revenue grew due to higher client activity in Asia wealth products. In addition, there was higher revenue allocated from Markets Treasury. These were partly offset by a decrease in Credit and Lending due to repayments as clients accessed attractive capital markets financing. ECL of $0.1bn were 72% lower than in 3Q23 on a constant currency basis. Operating expenses were $0.1bn or 5% higher on a constant currency basis, due to the impact of inflation and higher spend and investment in technology, partly offset by continued cost discipline.

Corporate Centre - constant currency basis

Results - on a constant currency basis
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2024			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	3,129	179	2,950	>100	3,731
ECL	(27)	(3)	(24)	>(100)	-
Operating expenses	(69)	33	(102)	>(100)	(7)
Share of profit from associates and JVs less impairment	2,189	2,083	106	5	-
Profit before tax	5,222	2,292	2,930	>100	3,723

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Nine months ended
			Variance
			9M24 vs. 9M23
	30 Sep 2024	30 Sep 2023			of which strategic transactions⁶
	$m	$m	$m	%	$m
Central Treasury¹	42	97	(55)	(57)	-
Legacy portfolios	23	(3)	26	>100	-
Other^2,3	3,064	85	2,979	>100	3,731
- of which: gain on the sale of our banking business in Canada and associated hedges⁴	4,795	(74)	4,869	>100	4,869
- of which: impairment loss relating to the planned sale of our business in Argentina	(1,151)	-	(1,151)	(100)	(1,151)
Net operating income⁵	3,129	179	2,950	>100	3,731
RoTE (annualised) (%)	14.4	7.3

1 Central Treasury comprises valuation differences on issued long-term debt and associated swaps and fair value movements on financial instruments.

2 Other comprises gains and losses on certain planned disposals, funding charges on property and technology assets, the results of the retained retail loan portfolio in France, revaluation gains and losses on investment properties and property disposals, as well as consolidation adjustments and other revenue items not allocated to global businesses.

3 Revenue from Markets Treasury, HSBC Holdings net interest expense and hyperinflation are allocated out to the global businesses, to align them better with their revenue and expense. The total Markets Treasury revenue component of this allocation for 9M24 was $1,199m (9M23: $(184)m). 9M24 included a loss of $0.1bn from Treasury repositioning and risk management actions.

4 Includes fair value gains/(losses) on the foreign exchange hedging of the proceeds of the sale and the recycling of reserves.

5 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

6 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Notable items
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Sep 2023
	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs¹	3,602	4	72	224
Fair value movements on financial instruments²	-	15	-	-
Early redemption of legacy securities	(283)		(283)
Currency translation on revenue notable items	-	12	-	10
Operating expenses
Disposals, acquisitions and related costs	(151)	(144)	(48)	(61)
Restructuring and other related costs	11	27	2	9
Currency translation on operating expenses notable items	-	-	-	-

1 Includes fair value movements on the foreign exchange hedging of the proceeds of the sale of our banking business in Canada and recycling of reserves and the loss on classification to held for sale of our banking business in Argentina.

2 Fair value movements on non-qualifying hedges in HSBC Holdings.

9M24 compared with 9M23

Profit before tax of $5.2bn was $2.9bn higher than in 9M23 on a constant currency basis, primarily reflecting the impact of certain acquisitions and disposals, including the gain on the sale of our banking business in Canada and an impairment relating to the planned disposal of our business in Argentina.

Revenue of $3.1bn was $3.0bn higher on a constant currency basis, primarily due to the impact of notable items. In 9M24, these included a $4.8bn gain on the sale of our banking business in Canada, inclusive of fair value gains on related hedging and recycling of related reserves. These were partly offset by a $1.2bn impairment recognised following the classification of our business in Argentina as held for sale, and a loss of $0.1bn related to the recycling of reserves following the completion of the sale of our business in Russia. In addition, 9M24 also included a $0.3bn loss on the early redemption of legacy securities. In 9M23, notable items included a favourable $0.1bn impact following the reversal of an impairment related to the sale of our retail banking operations in France. The increase in revenue was partly offset by adverse fair value movements on financial instruments in Central Treasury and structural hedges, a reduction following the transfer of the retained French retail portfolio from WPB, revaluation losses on investment properties in Hong Kong and an impairment of $0.1bn following the classification of our operations in Armenia to held for sale.

Operating expenses increased by $0.1bn on a constant currency basis. This included the impact of levies, as well as restructuring and other related costs.

Share of profit from associates and joint ventures of $2.2bn increased by $0.1bn or 5% on a constant currency basis, which included an increase in share of profit from SAB.

3Q24 compared with 3Q23

Results - on a constant currency basis
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions¹
	$m	$m	$m	%	$m
Revenue	(213)	178	(391)	>(100)	(159)
ECL	(21)	-	(21)	-	-
Operating expenses	42	23	19	83	13
Share of profit/(loss) from associates and JVs less impairment	592	587	5	1	-
Profit before tax	400	788	(388)	(49)	(145)

1 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Management view of revenue
	Quarter ended
			Variance
			3Q24 vs. 3Q23
	30 Sep 2024	30 Sep 2023			of which strategic transactions⁶
	$m	$m	$m	%	$m
Central Treasury¹	68	17	51	>100	-
Legacy portfolios	9	8	1	13	-
Other^2,3	(290)	153	(443)	>(100)	(159)
- of which: gain on the sale of our banking business in Canada and associated hedges⁴	-	214	(214)	(100)	(214)
- of which: impairment loss relating to the planned sale of our business in Argentina	31	-	31	>100	31
Net operating income⁵	(213)	178	(391)	>(100)	(159)

1 Central Treasury comprises valuation differences on issued long-term debt and associated swaps and fair value movements on financial instruments.

3 Revenue from Markets Treasury, HSBC Holdings net interest expense and hyperinflation are allocated out to the global businesses, to align them better with their revenue and expense. The total Markets Treasury revenue component of this allocation for 3Q24 was $313m (3Q23: $(546)m). 3Q24 included a loss of $0.1bn from Treasury repositioning and risk management actions.

4 Includes fair value gains/(losses) on the foreign exchange hedging of the proceeds of the sale and the recycling of reserves.

5 'Net operating income' means net operating income before change in expected credit losses and other credit impairment charges (also referred to as 'revenue').

6 Impact of strategic transactions classified as material notable items. For further details, see 'Strategic transactions supplementary analysis' on page 36.

Profit before tax of $0.4bn was $0.4bn or 49% lower than in 3Q23 on a constant currency basis, primarily due to a reduction in revenue. This was mainly due to a $0.3bn loss on the early redemption of legacy securities, as well as the non-recurrence of fair value gains of $0.2bn in 3Q23 relating to the foreign exchange hedging of the proceeds from the sale of our banking business in Canada. Lower revenue also reflected a reduction following the transfer of the retained France retail portfolio from WPB. The reduction in revenue was partly offset by favourable fair value movements on structural hedges, the reduction in the impairment related to the planned sale of our business in Argentina and the non-recurrence of losses following the merger of HSBC Bank Oman with Sohar International.

Supplementary financial information

Reported and constant currency results

Reported and constant currency results¹
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
	$m	$m	$m	$m	$m
Revenue²
Reported	54,290	53,037	16,998	16,540	16,161
Currency translation		(648)		116	(274)
Constant currency	54,290	52,389	16,998	16,656	15,887
Change in expected credit losses and other credit impairment charges
Reported	(2,052)	(2,416)	(986)	(346)	(1,071)
Currency translation		61		20	33
Constant currency	(2,052)	(2,355)	(986)	(326)	(1,038)
Operating expenses
Reported	(24,439)	(23,425)	(8,143)	(8,145)	(7,968)
Currency translation		358		(69)	145
Constant currency	(24,439)	(23,067)	(8,143)	(8,214)	(7,823)
Share of profit in associates and joint ventures
Reported	2,233	2,175	607	857	592
Currency translation		(47)		6	6
Constant currency	2,233	2,128	607	863	598
Profit before tax
Reported	30,032	29,371	8,476	8,906	7,714
Currency translation		(276)		73	(90)
Constant currency	30,032	29,095	8,476	8,979	7,624
Profit after tax
Reported	24,414	24,337	6,749	6,828	6,266
Currency translation		(131)		53	(16)
Constant currency	24,414	24,206	6,749	6,881	6,250
Loans and advances to customers (net)
Reported	968,653	935,750	968,653	938,257	935,750
Currency translation		39,391		28,254	39,391
Constant currency	968,653	975,141	968,653	966,511	975,141
Customer accounts
Reported	1,660,715	1,563,127	1,660,715	1,593,834	1,563,127
Currency translation		61,945		47,020	61,945
Constant currency	1,660,715	1,625,072	1,660,715	1,640,854	1,625,072

1 In the current period, constant currency results are equal to reported as there is no currency translation.

2 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Notable items
	Nine months ended		Quarter ended
	30 Sep 2024	30 Sep 2023	30 Sep 2024	30 Jun 2024	30 Sep 2023
	$m	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs^1,2,3,4	3,643	3,631	72	(161)	310
Fair value movements on financial instruments⁵	-	15	-	-	-
Disposal losses on Markets Treasury repositioning	-	(578)	-	-	(578)
Early redemption of legacy securities	(283)	-	(283)	-	-
Operating expenses
Disposals, acquisitions and related costs	(149)	(197)	(48)	(38)	(79)
Restructuring and other related costs⁶	22	77	3	6	30
Tax
Tax (charge)/credit on notable items	94	(374)	81	6	127
Uncertain tax positions	-	427	-	-	-

1 Includes the impacts of the sale of our retail banking operations in France.

2 Includes a gain of $1.6bn recognised in respect of the acquisition of SVB UK.

3 Includes a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses. This is partly offset by a $1.2bn impairment recognised in relation to the planned sale of our business in Argentina.

4 Includes fair value movements on the foreign exchange hedging of the proceeds from the sale of our banking business in Canada.

5 Fair value movements on non-qualifying hedges in HSBC Holdings.

6 Relates to reversals of restructuring provisions recognised during 2022.

Global businesses

Supplementary analysis of constant currency results and notable items by global business

Global business results - on a constant currency basis¹
	Nine months ended 30 Sep 2024
	Wealth and Personal Banking²	Commercial Banking	Global Banking and Markets	Corporate Centre²	Total
	$m	$m	$m	$m	$m
Revenue³	21,723	16,284	13,154	3,129	54,290
ECL	(926)	(1,041)	(58)	(27)	(2,052)
Operating expenses	(11,156)	(5,780)	(7,434)	(69)	(24,439)
Share of profit in associates and joint ventures	43	1	-	2,189	2,233
Profit before tax	9,684	9,464	5,662	5,222	30,032
Loans and advances to customers (net)	463,324	322,090	175,439	7,800	968,653
Customer accounts	830,785	487,484	342,072	374	1,660,715

1 In the current period, constant currency results are equal to reported, as there is no currency translation.

3 Net operating income before change in expected credit losses and other credit impairment charges, also referred to as revenue.

Notable items
	Nine months ended 30 Sep 2024
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue
Disposals, acquisitions and related costs¹	55	-	(14)	3,602	3,643
Early redemption of legacy securities	-	-	-	(283)	(283)
Operating expenses
Disposals, acquisitions and related costs	-	2	-	(151)	(149)
Restructuring and other related costs²	5	3	3	11	22

1 Includes a $4.8bn gain on disposal of our banking business in Canada, inclusive of a $0.3bn gain on the foreign exchange hedging of the sale proceeds, the recycling of $0.6bn in foreign currency translation reserve losses and $0.4bn of other reserves recycling losses. This is partly offset by a $1.2bn impairment recognised in relation to the planned sale of our business in Argentina.

2 Relates to reversals of restructuring provisions recognised during 2022.

Global business results - on a constant currency basis (continued)
	Nine months ended 30 Sep 2023
	Wealth and Personal Banking	Commercial Banking	Global Banking and Markets	Corporate Centre	Total
	$m	$m	$m	$m	$m
Revenue¹
Reported	22,919	17,640	12,388	90	53,037
Currency translation	(241)	(262)	(234)	89	(648)
Constant currency	22,678	17,378	12,154	179	52,389
ECL
Reported	(738)	(1,372)	(302)	(4)	(2,416)
Currency translation	46	16	(2)	1	61
Constant currency	(692)	(1,356)	(304)	(3)	(2,355)
Operating expenses
Reported	(10,858)	(5,480)	(7,182)	95	(23,425)
Currency translation	229	189	2	(62)	358
Constant currency	(10,629)	(5,291)	(7,180)	33	(23,067)
Share of profit/(loss) in associates and joint ventures
Reported	46	(1)	-	2,130	2,175
Currency translation	-	-	-	(47)	(47)
Constant currency	46	(1)	-	2,083	2,128
Profit before tax
Reported	11,369	10,787	4,904	2,311	29,371
Currency translation	34	(57)	(234)	(19)	(276)
Constant currency	11,403	10,730	4,670	2,292	29,095
Loans and advances to customers (net)
Reported	455,354	307,048	173,064	284	935,750
Currency translation	21,973	11,183	6,225	10	39,391
Constant currency	477,327	318,231	179,289	294	975,141
Customer accounts
Reported	792,928	459,945	309,785	469	1,563,127
Currency translation	29,913	17,348	14,650	34	61,945
Constant currency	822,841	477,293	324,435