HSBC profit drops as bank takes Madoff legal hit

HSBC reported falling quarterly profits Tuesday, with the banking giant's bottom line weighed down by legal provisions related to the late Bernard Madoff's huge investment fraud.

- AFP

The London-headquartered lender revealed the $1 billion-plus fallout Monday amid a Luxembourg lawsuit dating back to 2009, when Madoff was sentenced to 150 years in prison for running a pyramid-style scheme.

HSBC's chief executive Georges Elhedery praised the Asia-focused group's underlying performance during the third quarter "despite taking legal provisions related to historical matters", he said in the earnings statement.

Revenue rose 5 percent to $17.8 billion on higher customer activity, HSBC said. But net profit slid 21 percent to $4.87 billion in the July-September period compared with the third quarter of 2024.

Pretax profit was also down, falling 14 percent to $7.3 billion.

The falls reflected an increase in operating expenses and included legal provisions of $1.4 billion.