HSBC has set aside $1.1 billion in its Q3 2025 accounts after a Luxembourg court partially upheld claims related to the bank's involvement in the Bernard Madoff Ponzi scheme. The lawsuit, filed by Herald Fund SPC in 2009, alleges that HSBC's Luxembourg unit failed to prevent investor losses connected to Madoff's fraud. The bank has warned that the legal process could take several years to fully resolve.
The provision contributed to a 14% drop in pre-tax profits, down to $7.3 billion for the quarter. HSBC is also managing additional financial pressures, including a $1 billion provision for risks in China's and Hong Kong's real estate markets, and a 24% increase in operating costs due to ongoing restructuring. Despite these challenges, the bank reported a 15% rise in net interest income and a 12% increase in fee income, reflecting resilience in its core operations.
HSBC to take $1.1 billion hit after Luxembourg court ruling in Madoff case https://t.co/Jwy9Mynrx9 https://t.co/Jwy9Mynrx9
— Reuters World (@ReutersWorld) October 27, 2025
HSBC Holdings to Book $1.1B Provision Related to Madoff Case https://t.co/x3SiQhxzwU
— WSJ Markets (@WSJmarkets) October 27, 2025
HSBC Holdings boosted its income outlook despite a hefty drop in third-quarter profit due to $1.4 billion in legal charges. Read more: https://t.co/EcLpldTA8F pic.twitter.com/N67FYX0dc5
— Reuters Business (@ReutersBiz) October 28, 2025
HSBC will set aside a provision for a lawsuit brought by investors who lost money in Bernard Madoff’s Ponzi scheme after a court denied the bank’s appeal. It expects a 0.15 percentage point hit to its common equity tier one capital ratio as a result https://t.co/LoUUUofPUI pic.twitter.com/5JZqZBcErM
— Financial Times (@FT) October 27, 2025
HSBC to recognize $1.1 billion provision in third quarter after court ruling in Madoff case https://t.co/JYPfXlXstz
— CNBC (@CNBC) October 27, 2025
The Luxembourg ruling highlights the long-lasting financial and reputational impacts of the Madoff fraud on global banks. HSBC plans to appeal the decision and may pursue further legal avenues. While the ultimate resolution remains uncertain, the bank's measures demonstrate proactive risk management in navigating complex, multi-year litigation.
