HSBC beats estimates in Q3 as lending income jumps

HSBC Holdings Plc posted better-than-estimated profits as rising interest rates boosted margins on lending.

The London-headquartered bank said net interest income, a key measure of profitability, hit $8.6 billion, helping lift adjusted pretax profit by 18% to $6.5 billion and beating analysts' estimates.

The bank's NII, which measures what it makes from lending minus interest paid on deposits, had its best third quarter in more than eight years.

"Our strategy produced good organic growth in all three global businesses, and net interest income increased on the back of rising interest rates," Chief Executive Officer Noel Quinn said.

"We retained a tight grip on costs, despite inflationary pressures, and remain on track to achieve our cost targets for 2022 and 2023."

Central banks globally, including the Federal Reserve and the Bank of England, have raised rates rapidly in the past few months in a bid to contain inflation that's been running at four-decade highs. HSBC is the first major UK bank to report how it's fared during a turbulent third quarter.

HSBC is continuing to fend off calls to consider a breakup from major shareholder Ping An Insurance Group Co. The lender has insisted its pivot toward Asia is a more valuable strategy. Earlier this month, the bank said it was considering the sale of its Canadian business and further disposals are expected, though these are likely to be leavened by acquisitions in other areas considered core to the company's future.

HSBC, which generates most of its earnings in Asia, has said it remains committed to retaining its base in London. However, in a memo last month, the bank said it might give up the lease on its Canary Wharf headquarters when it comes up for renewal in 2027.