HSBC Holdings (HSBC Quick QuoteHSBC - Free Report) is scheduled to announce third-quarter 2025 results tomorrow, before market open. The company’s quarterly revenues and earnings are expected to have decreased on a year-over-year basis.

In the last reported quarter, HSBC’s results were hurt by a fall in revenues, higher expected credit losses and other credit impairment charges (ECL) and higher expenses.

The consensus estimate for the company’s earnings is pegged at $1.65 per share, which has remained unchanged in the past seven days. This indicates a decline of 2.9% from the year-ago quarter’s reported number.

The consensus estimate for sales is pegged at $16.83 billion, implying a roughly 1% fall.

Major Factors Expected to Impact HSBC’s Q3 Results

Investment Banking (IB) Revenues: Global mergers and acquisitions (M&As) in the third quarter rebounded solidly from the lows witnessed in April and May following President Donald Trump’s announcement of “Liberation Day” tariff plans. Companies quickly adapted to the rapidly changing geopolitical and macroeconomic scenarios. They took advantage of a strong U.S. economy, optimism over potential Federal Reserve interest rate cuts and a more accommodating regulatory environment under Trump. Thus, advisory fee growth is likely to have been strong for HSBC.

Further, the IPO market in the third quarter performed impressively, with a significant increase in both the number of IPOs and the amount of capital raised. Several factors, including strategic tariff pauses and positive economic data, drove the rise. Further, global bond issuance volume was decent. Thus, HSBC is expected to have witnessed decent growth in equity and debt underwriting fees.

Growth in IB revenues is expected to have been strong in the quarter.

Trading Revenues: Client activity and market volatility were solid in the third quarter. The uncertainty over the impact of tariffs on the U.S. economy and changes in the Fed’s policy stance drove client activity. Volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange.

Owing to solid volatility and higher client activity, HSBC’s trading business performance is expected to have been solid.

Interest Income: In the third quarter, the central banks across the globe exhibited a mixed approach to interest rate adjustments, with the majority of them keeping the rates steady. This reflected divergent perspectives on the economic outlook, with some central banks prioritizing inflation control while others focused on potential economic downturn. Hence, these are likely to have resulted in the stabilization of funding costs for HSBC and a modest rise in loan demand.
 
Thus, HSBC’s interest income is anticipated to have improved slightly in the to-be-reported quarter.

Expenses: Over the past several years, HSBC has been able to control expenses. However, overall costs are expected to have been high in the to-be-reported quarter, given the company’s focus on growing market share in the U.K. and Asia, as well as strengthening digital capabilities globally.
 
HSBC’s organizational overhaul plan is likely to have resulted in a further increase in expenses.

Update on HSBC’s Luxembourg Herald Fund SPC litigation

HSBC will recognize a provision of $1.1 billion in the third-quarter results on account of litigation related to the Luxembourg Madoff fraud.

This is expected to impact the bank’s common equity tier 1 ratio by roughly 15 basis points.

What the Zacks Model Unveils for HSBC

Our quantitative model does not conclusively predict an earnings beat for HSBC. This is because it lacks the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for HSBC is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Finance Stocks Worth Considering

Here are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:

The Earnings ESP for Ameriprise Financial (AMP Quick QuoteAMP - Free Report) is +2.55% and it carries a Zacks Rank #2 at present. The company is slated to report third-quarter 2025 results on Oct. 30.

Over the past week, the Zacks Consensus Estimate for AMP’s quarterly earnings has remained unchanged at $9.60 per share.

UMB Financial (UMBF Quick QuoteUMBF - Free Report) is scheduled to release its third-quarter 2025 numbers tomorrow. The company has an Earnings ESP of +0.49% and carries a Zacks Rank #3 at present.

Quarterly earnings estimates for UMBF have remained unchanged at $2.48 per share over the past week.