### HSBC Faces Profit Decline Amid Madoff Lawsuit Fallout HSBC Holdings plc has reported a significant decline in its pre-tax profits for the third quarter of 2025, primarily due to a substantial legal provision related to the infamous Ponzi scheme orchestrated by Bernard Madoff. The bank's profits fell by **14%**, amounting to **$7.3 billion** compared to **$8.5 billion** in the same quarter last year. This downturn is attributed to a **$1.1 billion** provision set aside for ongoing legal challenges stemming from Madoff's fraudulent activities, which have continued to impact financial institutions globally. The bank's overall performance, however, has shown resilience in other areas, with increased revenues and fee income reported despite the legal setbacks [https://finance.yahoo.com/news/hsbc-profits-third-quarter-madoff-lawsuit-074254754.html][https://finance.yahoo.com/news/hsbc-profits-slump-14-madoff-090012035.html]. ### Breakdown of HSBC's Third Quarter Performance 1. **Profit Decline**: - HSBC's pre-tax profit decreased to **$7.3 billion**, down from **$8.5 billion** year-over-year, marking a **14%** decline [https://finance.yahoo.com/news/hsbc-q3-pre-tax-earnings-165800052.html]. 2. **Legal Provisions**: - The bank allocated **$1.1 billion** for legal costs associated with the Madoff lawsuit, which has been a significant factor in the profit drop [https://www.independent.co.uk/news/business/hsbc-luxembourg-ponzi-scheme-british-court-of-appeal-b2853431.html][https://www.legit.ng/business-economy/economy/1680575-hsbc-profit-falls-quarter-hit-by-legal-woes]. 3. **Revenue Growth**: - Despite the profit decline, HSBC reported a **3%** increase in total revenue, reaching **$17.8 billion**, driven by a **30%** rise in wealth management fees and an increase in deposits by **$86 billion** [https://www.disruptionbanking.com/2025/10/28/hsbc-third-quarter-results-marred-by-madoff]. ### Supporting Data and Financial Metrics - **Pre-Tax Profit**: - Q3 2025: **$7.3 billion** - Q3 2024: **$8.5 billion** - **Legal Provisions**: - Total set aside for Madoff-related lawsuits: **$1.1 billion** - **Revenue Metrics**: - Total revenue for Q3 2025: **$17.8 billion** - Increase in wealth management fees: **30%** - Increase in deposits: **$86 billion** [https://bitcoinethereumnews.com/finance/hsbcs-q3-profit-fell-14-to-7-3-billion-due-to-a-1-1-billion-madoff-related-legal-charge]. ### Conclusion: Navigating Legal Challenges While Maintaining Growth In summary, **HSBC's third-quarter results reflect a complex interplay of legal challenges and operational resilience**. The bank's **14% profit decline** due to **$1.1 billion** in legal provisions highlights the ongoing impact of the Madoff scandal. However, the **3% revenue growth** and significant increases in wealth management fees and deposits indicate that HSBC is effectively navigating these challenges. 1. **Profit Impact**: Legal provisions significantly affected profits. 2. **Revenue Resilience**: Growth in other areas mitigated some financial impacts. 3. **Future Outlook**: HSBC's ability to manage legal costs while growing revenue will be crucial moving forward [https://www.cityam.com/hsbc-ftse-100-lenders-profit-slumps-as-legal-costs-jump][https://news.az/news/hsbc-profit-declines-on-madoff-related-legal-provisions].