HSBC UK has seen its profit before tax fall by 6% to $4.92bn in the nine months to 30 September.

The bank said its revenue increased by 4% in this period to $9.57bn, while its operating expenses jumped by 13% to $1.42bn.

HSBC reported that its profit reduction was primarily due to increased operating expenses, which reflected an inflationary impact and higher planned investment spend.

Across the entire group, profit before tax dropped by 23% year-on-year to $23.1bn. The bank suggested this was impacted by operating expenses increasing by $1.1bn following a legal provision in connection with developments in a claim in Luxembourg relating to the Madoff securities fraud.

Despite these results, group chief executive officer at HSBC, Georges Elhedery, said that it is "becoming a simple, more agile, focused bank".

He added: "The intent with which we are executing our strategy is reflected in our performance this quarter, despite taking legal provisions related to historical matters.

"We remain fully focused on helping our customers navigate new economic realities, putting their changing needs at the heart of everything we do."

In its outlook, HSBC expects to deliver mid-teens or better RoTE for 2025, reflecting "sustained momentum" in its earnings across the third quarter and "positive progress" in its strategic execution.

Furthermore, it said it would maintain confidence in its ability to deliver mid-teen RoTE for 2026 and 2027.

Investment director at AJ Bell, Russ Mould, commented that HSBC had delivered a good update to investors following the Madoff news.

He concluded: "While the Madoff-linked hit saw profit come in below expectations at a headline level, on an underlying basis the business is performing well and, crucially, somewhat better than the market was expecting.

"Slightly higher than anticipated operating costs are a slight negative, and investors will be watching future updates closely to see if this becomes a trend, and exposure to a tricky Hong Kong property market is another risk.

"However, these numbers will give Elhedery a boost after the recent negative reaction to the decision to pause buybacks and use cash to buy out minority investors in Hong Kong’s Hang Seng bank and the Madoff news."

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