HSBC to recognize $1.1B provision in Q3 after Luxembourg Court ruling

In a filing, HSBC (HSBC) Holdings noted that, in a 2009 lawsuit in Luxembourg relating to the Bernard L. Madoff Investment Securities LLC fraud, HSBC Securities Services Luxembourg is defending a claim brought by Herald Fund SPC for restitution of securities and cash. On October 24, 2025, the Luxembourg Court of Cassation denied HSSL’s appeal in respect of Herald’s securities restitution claim, but accepted HSSL’s appeal in respect of Herald’s cash restitution claim. HSSL will now pursue a second appeal before the Luxembourg Court of Appeal. If HSSL is unsuccessful in that second appeal, it will contest the amount HSSL is required to pay in subsequent proceedings before the Court of Appeal. Following this development, HSBC Holdings plc will recognize a provision of $1.1B in its consolidated financial results for Q325, an around 15 bps impact on the Group’s CET1 capital ratio. Given the pendency of the second appeal and the complexities and uncertainties associated with determining the quantum of restitution, the eventual financial impact could be significantly different. The provision will be classified as a material notable item and will not impact FY25 RoTE excluding notable items or any dividend.