Global bank HSBC $HSBA (-1,13 %) and Mistral AI have announced an agreement that they say will spread the use of generative AI across the financial institution, saving staff time and improving processes.

In a statement announcing the multi-year agreement, the financial details of which were not disclosed, both companies said the bank will have access to Mistral AI's commercial models, including future developments.

The $65.9 billion bank said it would combine its "strong in-house technology capabilities" with the French LLM developer's expertise "to enhance current AI initiatives through self-hosted AI models running on HSBC's internal technology systems".

The use of AI platforms could "help client-facing teams to quickly deliver tailored communications" and "enable marketing teams to run hyper-personalized campaigns". The bank is also considering the use of AI to improve the financial analysis of complex and document-intensive customer lending or financing processes.

In a prepared statement, HSBC Group CEO Georges Elhedery said: "The partnership will provide our colleagues with tools to help them innovate, simplify their daily tasks and free up time for our clients." The collaboration is the latest in a series of plans announced by global banks to signal their intention to adopt generative AI.

Bank of America $BAC (-0,14 %) for example, has announced plans to invest billions of dollars in technologies such as AI to boost employee productivity and generate more revenue. It has told investors that it has earmarked $4 billion in its $13 billion technology budget for new technologies such as AI.

Hari Gopalkrishnan, Bank of America's chief technology and information officer, said relationship managers could serve more customers by using AI for tasks such as preparing client briefings before meetings. "One banker can now serve 50 clients instead of 15. And that's what we're seeing in practice right now."

In October, the British Lloyds Banking Group promised $LLOY (+0 %)promised to continue using "digitalization" to drive forward a branch closure program. It had invested £3 billion over three years and £4 billion over five years in transformation, much of which had gone into technology and cyber security, it told investors.

It said it had already made savings of £1.5 billion and promised to look for further ways to reduce manual back-office processes.

In July, the NatWest Group announced $NWG (-1,77 %) announced a five-year collaboration with AWS and Accenture to improve its analytics performance for customer data and make better use of AI and the cloud.

The bank said it was preparing to "consolidate disparate data streams into a single, bank-wide data platform enabled by AI".

A shock report from HSBC $HSBA (-1,13 %) questions the financial viability of OpenAI and its gigantic cloud obligations into question.

Despite optimistic growth scenarios, the revenues are nowhere near sufficient to cover the massive data center costs.

》Free cash flow not in sight《

OpenAI, the pioneer behind ChatGPT and the catalyst of the current AI boom, is facing a potentially huge financial problem. A recent analysis by investment bank HSBC comes to an alarming conclusion: the contractually agreed obligations for computing power far exceed the forecast revenue - even if extremely optimistic assumptions are made.

》The bill《

36 gigawatts and $620 billion in rent!

In order to operate the enormous AI models and secure future growth, OpenAI has concluded massive contracts and cooperations with cloud providers and companies from the AI environment.

From chip manufacturer Nvidia$NVDA (-0,35 %), Amazon $AMZN (+0,3 %)Oracle$ORCL (+1,37 %) or Meta$META (+1,48 %) - OpenAI is associated with virtually every big name in the industry.

Some refer to this as a Ponzi scheme. In recent months, reports of contracts and numerous declarations of intent have boosted the shares of many players.

Anyone who announced a contract or cooperation with OpenAI often saw their shares rise by double-digit percentages in a single day. Investors were in a frenzy.

However, HSBC sees the financing of these deals as virtually impossible. An overview:

》Contractual obligations《

According to estimates, OpenAI has committed up to 250 billion US dollars in cloud compute with Microsoft and 38 billion US dollars with Amazon.

》The hunger for power《

The total contractually agreed computing power amounts to an astronomical 36 gigawatts. Some data centers in the USA are already at a standstill because they cannot get the required connection to the power grid, see here:.

》The cost explosion《

Based on a total value deal of up to USD 1.8 trillion, HSBC estimates that OpenAI is heading for annual rental payments for data centers of around USD 620 billion.

》The gigantic financing gap《

HSBC has set OpenAI's revenues up to 2030 (and beyond) against these exploding costs. The result is sobering:

》Item:Cumulative total to 2030《

● Cumulative rental costs (data centers) $792 billion

● Cumulative free cash flow (HSBC estimate) $282 billion

● Additional financing (capital injections, loans, etc.) $67 billion

● Total funds available $349 billion

● Shortfall (financing gap) -$443 billion

The HSBC calculation results in a cumulative funding gap of $207 billion by 2030, plus a recommended safety buffer of $10 billion.

》The optimistic assumptions that are still not enough《

The remarkable thing about the HSBC analysis is that this massive gap arises despite the assumption of best-case scenarios:

1. massive user base: OpenAI reaches 3 billion users by 2030 (44% of the global adult population outside China). Our take: impossible, as the competition from Google $GOOGL (+0,87 %) (Gemini) or Anthropic has been catching up since 2024, as the following graph (estimate) shows:

2. high paying ratio: 10 percent of these users will become paying subscribers, but currently it is only around 5 percent.

3. advertising market share: OpenAI captures two percent of the total digital advertising market.

4. enterprise AI: The enterprise AI sector generates 386 billion US dollars annually.

Even if all these very ambitious assumptions are true, the company will not be able to fulfill its commitments.

There has long been speculation about an IPO of OpenAI, with a valuation of between 500 billion and 1 trillion US dollars being floated.

》Conclusion《

The HSBC study suggests that OpenAI may have to "back away from data center commitments" and hope that the major partners will show "flexibility".

This is a polite way of saying that the current business model is not sustainable in this form and the contracts may need to be ignored to avert a liquidity crisis.

We would even say: this is impossible. It all smells like a bubble that will burst at some point.

And it is practically impossible to finance such amounts.

The question remains whether these data centers on this scale are even necessary.

Mistral AI, the only European player, for example, and the four Chinese providers, expect far less demand.

Of course, there are also those who claim that MICROSOFT, which has close ties to OpenAI and is a major shareholder, is snapping up the fillet pieces of the company and leaving the rest to die a miserable death.

HSBC Bank Malaysia has opened a new wealth center in Johor Bahru. This is part of its strategy to expand its business with high net worth and ultra-high net worth clients and strengthen its presence in key cross-border growth corridors.

The center is located at the bank's branch in Jalan Bukit Timbalan and is available by appointment only. It serves Premier Elite clients and offers customized personal wealth management solutions with a focus on wealth accumulation, protection and estate planning.

Premier Elite is available to selected Premier account holders who maintain a minimum balance of RM3 million with HSBC $HSBA (-1,13 %) with HSBC.

Clients also gain access to senior relationship managers, wealth specialists and customized portfolio solutions.

The launch was officiated by Mr. Lee Ting Han, Chairman of the Investment, Trade, Consumer Affairs and Human Resources Committee of the State of Johor and attended by Datuk Omar Siddiq, CEO of HSBC Malaysia and Linda Yip, Country Head of International Wealth and Premier Banking.

HSBC said Johor is an ideal location due to its proximity to Singapore and the increasing investment inflows from the Johor-Singapore Special Economic Zone, as well as the state's diversification into data centers, digital infrastructure and advanced manufacturing.

Lee said the pursuit of higher growth coupled with a stronger ringgit is raising living standards and bringing the state closer to high-income status. He added that the financial sector and international connectivity play a crucial role in supporting this development.

Yip described the opening as an important milestone for HSBC's wealth management business. "This investment reflects our confidence in the growth potential of the state of Johor and the increasing need for sophisticated wealth solutions for our growing number of Premier Elite clients," she said in a statement.

The new center is also adorned with HSBC's two famous lions, Stephen and Stitt, which stand overlooking the Straits of Johor and symbolize the international flow of wealth. It houses "Tides", an art installation by Malaysian artist Red Hong Yi, made up of 12,960 gold 50 sen coins, depicting the rising movements of ocean waves and the flow of wealth across generations.

The opening in Johor Bahru follows the opening of HSBC's flagship wealth center in the Tun Razak Exchange financial district earlier this year and is part of its ambition to become a leading international wealth manager in Malaysia.

I'm currently in Singapore and what can I say... I'm really excited about this city!

From the financial district with all the famous banks like: $D05 (-0,28 %)
, $U11 (+0,64 %) , $O39 (-0,12 %)
,$HSBA (-1,13 %) , to the mix of modern architecture 🏛️ green oases 🌴 and incredible efficiency🚊

The exciting thing for me as an investor is that these banks are not just impressive buildings, they are also part of my portfolio.

In 2025 alone, they have saved me a total of around 815 € in net dividends so far. At the end of November, I will receive a further €90 from DBS and €17 from HSBC in December.

It's nice to think that my investments have literally helped finance my trip to Singapore. 🏝️📈

(Dividends from my ETFs are not included here, by the way 😉)

#Dividenden
#FinanzielleFreiheit
#Singapore
#DBS
#OCBC
#UOB
#HSBC
#Maybank
#GetquinCommunity

October was the month of big decisions and consistent adherence to the plan! While the crypto market was still euphorically looking upwards, I think I recognized the signals: The bull market came to an end around October 21, For me it was time for an exit from this asset class. With the exception of a small holding of a few euros in $BTC (+0,49 %) as a souvenir, I am completely out of crypto. Everything was shifted to my crypto successor portfolio. Sure, there was a brief tingling sensation and I wondered whether I was getting out too early.

But there are plans precisely for scenarios like this. To conquer emotions that jeopardize profits and let discipline prevail. And how am I feeling now after the exit? Pure relief! Finally no longer sitting there hoping that things will rise to my desired level or stay there. I'll reveal in detail what happens next for me in the coming year.

At the same time, the half-year bonus was added to the portfolio, the dividend base was broadened and I was able to relax and let it all sink in while hiking in the autumn air. My portfolios continued to do their job. The cash flow is flowing. Time for a review of a month that shows that a strategy beats FOMO.

Overall performance

October brought another boost for me in some assets, while others consolidated somewhat. Perhaps this is already a sign that stocks are positioning themselves for the year-end rally? I am firmly convinced that the current shutdown in the US administration will not act as a brake here. My key performance indicators for my overall portfolio at a glance:

• TTWROR (month under review): +1,39% (previous month: +1.76%)
• TTWROR (since inception): +77,04%
• IZF (month under review): +17,65% (previous month: +9.64%)
• IZF (since inception): +10,94%
• Delta: +1,160.94€
• Absolute change: +€2,224.10

Performance & volume

$AVGO (+2,71 %) is still my largest single position, but is losing momentum this month. However, its distance to the other positions is large enough, no one in the portfolio can hold a candle to my +337% share. But $NFLX (-2,67 %) and $GOOGL (+0,87 %) and others are trying hard to get there. Alphabet is now in the top 5 by volume and performance. I like the company. With YouTube and Cloud Services, they have good cash cows that enhance traditional search. And this is now also being upgraded with Gemini integrated into search. And Nano Banana ... wow.

Google is not always the leader, but it is always catching up. The competition between the tech giants is a spectacle that I love to watch.

And yet I prefer to rely on the more stable industries. Even the $BAC (-0,14 %) and $WMT (+0,35 %) continue to cut a good figure. Boring, but still good businesses that generate income. That's what I want! These are really two sectors that I have become very fond of. Nevertheless, the red lantern once again goes to $TGT (+0,92 %) which continue to have a hard time. But I'm sticking with it and buying more. Because $TGT (+0,92 %) is systemically relevant and will not go to the dogs. They just have problems with theft and competition.

Size of individual share positions by volume in the overall portfolio:

Share (%) of the total portfolio and associated securities account:

$AVGO (+2,71 %) 3.14% (main share portfolio)

$NFLX (-2,67 %) 1.72% (main share portfolio)

$WMT (+0,35 %) 1.65% (main share portfolio)

$BAC (-0,14 %) 1.48% (main share portfolio)

$GOOGL (+0,87 %) 1.41% (main share portfolio)

Smallest individual share positions by volume in the overall portfolio:

Share (%) of the total portfolio and associated securities account:

$NOVO B (+0,63 %) 0.45% (main share portfolio)

$BATS (-1,51 %) : 0.50% (crypto follow-on portfolio)

$GIS (-0,03 %) 0.55% (main share portfolio)

$TGT (+0,92 %) 0.58% (main share portfolio)

$MDLZ (-1,15 %) 0.60% (main share portfolio)

Top-performing individual stocks

Shares with performance since initial purchase (%) and the respective portfolio:

$AVGO (+2,71 %) : +337% (main share portfolio)

$NFLX (-2,67 %) +151% (main share portfolio)

$GOOGL (+0,87 %) +99% (main share portfolio)

$WMT (+0,35 %) +77% (main share portfolio)

$BAC (-0,14 %) + 74% (main share portfolio)

Flop performer individual stocks

Shares with performance since initial purchase (%) and the respective portfolio:

$TGT (+0,92 %) : -35% (main share portfolio)

$GIS (-0,03 %) -34% (main share portfolio)

$NKE (+0,45 %) : -32% (main share portfolio)

$NOVO B (+0,63 %) -28% (main share portfolio)

$CPB (+0,5 %) : -27% (main share portfolio)

Asset allocation

Due to my crypto reallocation, the ETF share is increasing. My asset allocation is as follows:

ETFs: 41.5%

Equities: 58.4%

Crypto: less than 0.01%

P2P: less than 0.01%

Investments and subsequent purchases

I have invested the following amounts in savings plans:

Planned savings plan amount from the fixed net salary: €1,030

Planned savings plan amount from the fixed net salary, incl. reinvested dividends according to plan size: €1,140

Savings ratio of the savings plans to the fixed net salary: 49.75%

In addition, there were the following additional investments from returns, refunds, cashback, etc. as one-off savings plans/repurchases:

Subsequent purchases/one-off savings plans as cashback annuities from refunds: € 73.00

Subsequent purchases/one-off savings plans as a cashback annuity from bonuses: € 894.97

Subsequent purchases from other surpluses: €31.00

Automatically reinvested dividends by the broker: €2.76 (function is only activated for an old custody account, as I otherwise prefer to control the reinvestment myself)

Additional purchases from crypto sales: €1,604.86

Additional purchases were made in various custody accounts outside the regular savings plans:

Number of additional purchases: 9

124.97€ for $SPYD (+0,02 %)

770,00 $JEPQ (+1,01 %)

28.00€ for $JEGP (-0,43 %)

45,00€ for $GGRP (+0,06 %)

477,77€ for $DXSA (-0,31 %)

252,51€ for $EXX5 (+0,17 %)

270,99€ for $SHEL (-1,62 %)

102,97€ for $HSBA (-1,13 %)

445.58€ for $BATS (-1,51 %)

Passive income from dividends

My income from dividends amounted to € 148.90 (€ 81.32 in the same month last year). This corresponds to a change of +82.43% compared to the same month last year. The strong increase is due to the fact that my large Vanguard ETFs postponed the distribution to the reporting month. Further key data on the distributions follows:

Number of dividend payments: 26

Number of payment days: 10 days

Average dividend per payment: €5.73

average dividend per payment day: €14.89

The top three payers are:

$ISPA (+0,14 %)

$VHYL (+0,12 %)

$VWRL (+0,32 %)

My passive income from dividends (and some interest) mathematically covered 16.05% of my expenses in the month under review.

Crypto performance

My crypto portfolio is distorted by the sell-off and will not be calculated again until I get back in. That will now take quite a while. I got out later than I wanted to, but still made a good profit. Only the Oracle of Delphi knows whether I am right with my approach. My key figures:

Performance in the reporting period: -

Performance since inception: -

Proportion of holdings for which the tax holding period has expired: 100%.

Crypto share of the total portfolio: less than 0.001%

Now it's time for the same thing as last crypto winter. Learning and understanding. And the current crypto winter hasn't even started yet. However, I think that prices will fall less sharply than in previous cycles and that the decline will be more orderly due to institutional adaptation. That's a good thing right now, as it makes it easier to get back in.

Performance comparison: portfolio vs. benchmarks

A comparison of my portfolio with two important ETFs shows:

TTWROR (current month): +1,39%

$VWRL (+0,32 %) : +4,66%

$VUSA (+0,23 %) : +2,76%

I am lagging behind the ETFs. 🤷🏼‍♂️

Risk ratios

Here are my risk figures for the month under review:

Maximum drawdown: 1.94% (YTD: 17.17%)

Maximum drawdown duration: 13 days (YTD: 702 days)

Volatility: 2.51% (YTD: 28.02%)

Sharpe ratio: 7.03 (YTD: 0.39)

Semi-volatility: 1.69% (YTD: 20.82%)

A drawdown of only 1.94% in October? That's exactly how it should be. While the markets trended sideways to slightly upwards, my portfolio remained frighteningly boring. And in the best sense of the word. The volatility of 2.51 % and the semi-volatility of 1.69 % confirm that my crypto exit has increased the stability of my portfolio. No more wild swings, just solid growth. The Sharpe ratio of 7.03? Brutally good. Maybe Trump's China deal helped the markets, maybe it was just my perfect timing. No matter! The figures speak for themselves: strategy beats chaos.

Outlook

Thanks for reading, this time I want to keep the outlook deliberately short. I'm glad that you're honoring the several days of work in front of the computer in the evenings when others are chilling with Netflix with your lifetime. I don't have anything else for the miscellaneous category this time. If you want to know what else is on my mind, please refer to the August review. I'll have something to say about that next December, I think. Stay safe and sound!

👉 Would you like to see my review as an Instagram Carousel post?

Then follow me on Instagram:

📲 In addition to the portfolio and budget review, there are currently three posts a week: @frugalfreisein

Please pay close attention to the spelling, unfortunately there are too many fake and phishing accounts on social media. I have also been "copied" several times now.

👉 How was your month in the portfolio? Do you have any tops and flops to report?

Leave your thoughts in the comments!

The British bank HSBC $HSBA (-1,13 %) has booked a provision of 1.1 billion US dollars for legal proceedings in Luxembourg in connection with Bernard Madoff's multi-billion dollar Ponzi scheme, one of the largest financial fraud cases in US history.

The London-based bank announced that one of its subsidiaries has been sued by Herald Fund SPC for the return of securities and cash in connection with the fraud perpetrated by the investment firm Bernard L. Madoff Investment Securities LLC. On Friday, the Luxembourg Court of Cassation dismissed the subsidiary's appeal against the Herald claim with regard to the return of securities, but accepted it with regard to the return of cash.

Bernard Madoff, former chairman of the Nasdaq Stock Exchange and a fixture on Wall Street for decades, shocked the world in 2008 by admitting that his investment business was a multibillion-dollar Ponzi scheme. He pleaded guilty in 2009 and was sentenced to the longest permissible sentence. Madoff died in 2021.

He had not invested his clients' money, but instead pushed billions of dollars into his company's bank accounts and falsified profit statements year after year. A court-appointed trustee estimated that Madoff misappropriated 17 billion dollars in client funds as part of his fraud.

Various HSBC companies provided custody and administration services to a number of funds whose assets were invested with Madoff's firm. Many HSBC companies have been named as defendants in lawsuits arising from the Madoff fraud.

HSBC announced on Monday that the subsidiary will now file a second appeal with the Luxembourg Court of Appeal. If this second appeal is unsuccessful, HSBC would contest the amounts it is required to pay in subsequent proceedings.

The bank stated that the final financial impact could be significantly different given the pending second appeal and the complexity of determining the amount of restitution.

October 28, 2025 HSBC Group Announcement $HSBA (-1,13 %) on the figures for the third quarter:

Georges Elhedery, Group CEO, said:

"We are becoming a simpler, more agile and more focused bank, building on our core competencies. The intent with which we are executing our strategy is reflected in our performance this quarter, despite having taken legal provisions related to historical matters. The positive progress we are making gives us confidence that we can raise our targets and we now expect RoTE to be mid-teens or better in 2025 with no significant items. We remain fully focused on helping our customers navigate the new economic realities by putting their changing needs at the heart of everything we do."

Financial performance in 3Q25

• Reported profit before tax of USD 7.3 billion was USD 1.2 billion lower than in 3Q24. The decrease reflected an increase in operating expenses primarily due to notable items in 3Q25, including legal provisions of $1.4 billion. This was partially offset by revenue growth, which included an increase in net interest income ('Banking NII') and strong performance in assets, while fee and other income declined in global foreign exchange, debt and equity markets. Profit after tax of $5.5 billion was $1.2 billion lower than 3Q24.
• Currency adjusted profit before tax excluding significant items amounted to $9.1 billion, an increase of $0.3 billion or 3% compared to 3Q24, as revenue growth, driven by continued strong asset performance, was partially offset by an increase in operating expenses due to planned capital expenditures and inflationary impacts.
• The annualized return on average tangible equity ("RoTE") was 12.3% in 3Q25, compared to 15.5% in 3Q24. Excluding notable items, the annualized RoTE in 3Q25 was 16.4%, which corresponds to an increase of 0.5 percentage points compared to 3Q24.
• Sales increased by $0.8 billion or 5% to $17.8 billion compared to 3Q24. In our International Wealth and Premier Banking ("IWPB") and Hong Kong business segments, we saw growth in fee and other income in Wealth, supported by higher client activity, while fee and other income declined in Global Foreign Exchange and in Debt and Equity Markets in our Corporate and Institutional Banking ("CIB") segment due to lower client activity amid lower market volatility. The increase also reflects growth in Banking NII. Constant currency revenue excluding significant items increased by $0.5 billion to $17.9 billion.
• The Net interest income (NII) of USD 8.8 billion increased by USD 1.1 billion or 15 % compared to 3Q24, which included a benefit from the absence of a loss of USD 0.3 billion in 3Q24 from the early redemption of legacy securities. The increase also reflects deposit growth and the benefit of our structural hedge, which was partially offset by a $0.3 billion decrease due to the divestiture of our business in Argentina. The decline in interest rates reduced trading book funding costs by $0.7 billion compared to 3Q24, resulting in an increase in NII in the banking business of USD 0.5 billion or 4% to USD 11.0 billion.
• The Net interest margin (NIM) increased by 11 basis points ('bps') compared to 3Q24 from 1.57%, including a benefit from the non-recurrence of a loss on the early redemption of legacy bonds in 3Q24, partially offset by the divestment of our business in Argentina. Net interest income increased by 1 basis point compared to 2Q25 as an increase in net interest income was partially offset by an increase in average interest earning assets (AIEA).
• Expected credit losses (ECL) of USD 1.0 billion remained stable compared to 3Q24. The charge in 3Q25 was primarily related to Level 3 wholesale risk fees, including incremental fees related to the Hong Kong commercial real estate sector, a charge on a Middle East exposure and fees on a small number of exposures in our UK business. This was partially offset by releases due to a stabilization in the macroeconomic outlook in 3Q25. ECL in 3Q24 included expenses for exposures in the onshore Hong Kong CRE and Mainland China CRE sectors.
• Operating expenses of US$10.1 billion were US$1.9 billion or 24% higher than in 3Q24. The increase reflects notable items including $1.4 billion of legal provisions for historical matters, including $1.1 billion related to the development of a claim in Luxembourg related to the Madoff securities fraud and $0.3 billion related to certain historical trading activities of HSBC Bank plc. Notable items also included restructuring and other related costs associated with our organizational simplification of $0.2 billion. There were also higher planned expenditure and investment in technology and the impact of inflation. These increases were partially offset by the impact of the divestment of our business in Argentina and the benefits of our restructuring measures. Operating expenses on a base basis were $8.4 billion, $0.3 billion or 3% higher than 3Q24.
• Customer loan balances increased $1.2 billion compared to 2Q25, including adverse currency translation effects. On a constant currency basis, loan balances increased by USD 5.6 billion, including growth in commercial customer loans and mortgages in our UK business as well as an increase in IWPB from private bank lending in Hong Kong and Singapore and growth in mortgage balances in Singapore and Australia.
• Customer accounts increased by USD 18.6 billion compared to 2Q25, including unfavorable currency translation differences. On a constant currency basis, customer accounts increased by USD 25.5 billion, driven by CIB growth in Asia, Europe, the UK, the Middle East and the US.
• The Common Equity Tier 1 capital ratio (CET1) decreased by 0.1 percentage points compared to Q2 25 by 0.1 percentage points, which was due to a decrease in Common Equity Tier 1 (CET1) capital reflecting the recognition of statutory provisions of USD 1.4 billion in 3Q25, partially offset by a decrease in risk-weighted assets ("RWAs"). The decrease in risk-weighted liabilities was mainly due to a reduction in risk-weighted market riska and changes in methodology and policy for risk-weighted credit risk values.
• The Board of Directors has declared a third interim dividend for 2025 of USD 0.10 per share. On October 24, we completed the USD 3 billion share buyback announced at our interim results on July 30, 2025.

Financial performance in 9M25

• Reported profit before tax decreased by USD 6.9 billion to USD 23.1 billion compared to 9M24, mainly due to a year-on-year impact of USD 8.2 billion from notable items, including the absence of USD 3.6 billion of net gains in 9M24 related to our divestitures in Canada and Argentina, the recognition of USD 2.1 billion of dilution and impairment charges in 9M25 related to our subsidiary Bank of Communications Co, Limited ("BoCom"), statutory provisions of USD 1.4 billion and restructuring and other related costs in connection with our organizational simplification of USD 0.8 billion in 9M25. Profit after tax decreased by USD 6.5 billion to USD 17.9 billion compared to 9M24.
• Currency adjusted profit before tax excluding significant items amounted to USD 28.0 billion, an increase of USD 1.2 billion or 4 % compared to 9M24, as higher fee and other income growth in assets in our IWPB businesses and Hong Kong and from foreign exchange, debt and equity markets in our CIB business segment mitigated an increase in ECL and a planned increase in operating expenses.
• The annualized RoTE in 9M25 was 13.9%, compared to 19.3% in 9M24. Excluding notable items, the annualized RoTE in 9M25 was 17.6%, which corresponds to an increase of 0.9 percentage points compared to 9M24.
• Sales decreased by USD 2.4 billion or 4% to USD 51.9 billion compared to 9M24, reflecting the impact of notable items compared to the prior year, mainly from divestitures in Canada and Argentina in 9M24. Excluding notable items, revenue increased, primarily due to growth in fees and other income in the asset, foreign exchange, debt and equity markets of CIB. Constant currency revenue excluding significant items increased by USD 2.4 billion to USD 53.3 billion compared to Q24.
• NII of $25.6 billion increased by $1.1 billion compared to 9M24, including a negative impact of $1.5bn from business disposals in Argentina and Canada, which was partially offset by the positive impact of the absence of a $0.3bn loss in 3Q24 on the early redemption of legacy securities. NII growth was driven by the benefit of our structural hedge, an increase in deposits and lower funding costs, which mitigated the impact of lower market interest rates. The decline in interest rates reduced trading book funding costs by USD 1.5 billion, resulting in a USD 0.4 billion decrease in Bank NII to USD 32.4 billion.
• The net interest effect was a net interest effect of 1.57% compared to 9M24, as the improved margins in our main markets were offset by the impact of the divestment of our business in Argentina.
• ECL amounted to USD 2.9 billion, an increase of USD 0.9 billion compared to 9M24. The increase included higher charges of $0.6 billion related to the CRE sector in Hong Kong, which included higher impairment charges for new defaulted risk exposures, the impact of an oversupply of non-residential real estate which has exerted continued downward pressure on rental and capital values, and updates to our models used for ECL calculations. The increase also included a charge for an exposure to the Middle East in the third quarter. In 9M24, the ECL charge benefited from the release of certificates, mainly in the UK, and a recovery relating to a single CIB client. Annualized ECL expenses were 40 basis points of average gross loans, including loans and advances classified as held for sale.
• Operating expenses increased by USD 2.7 billion, or 11%, to USD 27.1 billion compared to 9M24. The increase primarily reflects notable items in 9M25, including legal provisions of USD 1.4 billion, restructuring and other related costs associated with our organizational simplification of USD 0.8 billion and USD 0.2 billion related to strategic transactions. In addition, there were higher planned expenditures and investments in technology and the impact of inflation. These increases were partially offset by reductions related to our business disposals in Canada and Argentina and the benefits of our organizational simplification. Operating expenses on a target basis increased $0.7 billion, or 3%, compared to the 24th quarter, primarily due to higher expenses and targeted investments in technology as well as the impact of inflation.

Outlook

• We expect to achieve RoTE in the mid-teens or better for 2025, with no significant items. This reflects the continued momentum in earnings across our four divisions in the third quarter and the positive progress we are making in implementing our strategy. Our guidance reflects a seasonally lower RoTE in the fourth quarter, which includes historically lower client activity in the wealth division and certain cost items specific to the fourth quarter (e.g. the UK bank levy). This also includes higher capitalization following our announcement to temporarily not initiate share buybacks as part of our proposal to privatize Hang Seng Bank Limited ("Hang Seng Bank").
• We remain confident that we can achieve our mid-teens RoTE target with no significant items for 2026 and 2027.
• We now expect the bank NII to be USD 43 billion or more in 2025, reflecting reflecting increased confidence in the near-term direction of policy rates in key markets, including Hong Kong and the UK.
• We continue to expect ECL fees as a percentage of average gross loans to be around 40 basis points in 2025 (including loans held for sale).
• The targeted growth in operating costs on a 2025 basis compared to 2024 remains at around 3%, including the impact of savings related to the announced restructuring in connection with simplification.
• While loan demand remained subdued in the first nine months of the year, we expect continue to expect customer loan balances to grow in the mid-single-digit percentage range year-on-year in the medium to long term.
• We continue to expect average annual growth in the double-digit percentage range for fees and other income from assets.
• We are sticking to our medium-term target range for the Common Equity Tier 1 (CET1) ratio of 14% to 14.5%. The expected impact on capital of the proposed Hang Seng Bank privatization transaction on day one is a net reduction of approximately 125 basis points, which would occur following the adoption of the relevant resolutions with the required majority at the Hang Seng Bank Court Meeting and the Hang Seng Bank AGM. Having announced that we will temporarily not initiate share buybacks, we expect to increase Common Equity Tier 1 capital prior to completion of the transaction, and although we may fall short of our Common Equity Tier 1 target range if the expected capital impact materializes on day one, we expect to bring our Common Equity Tier 1 ratio back into our target range through a combination of organic capital generation and the impact of no share buybacks. A decision on the resumption of buybacks is subject to our usual quarterly buyback considerations and processes. We maintain our dividend payout ratio target of 50% for 2025, excluding material notable items and associated impacts.

Our targets and expectations reflect our current outlook for the global macroeconomic environment and market-dependent factors, such as market-implied interest rates (as of mid-October 2025) and exchange rates, as well as customer behavior and activity levels.

We do not reconcile our forecast for RoTE excluding the impact of notable items, operating expenses on a target basis, dividend payout ratio, target basis or NII in banking with the corresponding reported metrics.

See page 6 for a further explanation of RoTE excluding notable items, Bank NII, Operating expenses on a target basis and Dividend payout ratio target basis. Further information on our CET1 ratio can be found on page 51.

HSBC $HSBA (-1,13 %) has entered into a new partnership with Accel-backed payments infrastructure company Juspay to develop a new digital acquiring platform for global merchants.

The platform will combine payment processing, fraud management and settlement services into a single stack solution that will provide "an agile, end-to-end acquiring experience that rivals the capabilities of modern acquirers", according to a joint statement.

This includes native and customized checkout interfaces, transaction processing with intelligent routing and retry capabilities, access to local payment methods, integrated risk and fraud management systems, automated chargebacks and dispute processing, and reconciliation and settlement layers with control and monitoring tools.

The partnership combines HSBC's network, which spans 57 countries and territories, with Juspay's payment infrastructure offering, which currently processes over 300 million transactions daily.

This development comes just days after HSBC announced the launch of a new merchant services division in Juspay's home market of India.

As a complementary offering, HSBC Digital Merchant Services (DMS) will provide "a comprehensive digital payment management solution designed to optimize payment processes for e-commerce merchants," the bank announced on Thursday.

Businesses can use DMS to accept various payment methods, including Mastercard, Visa and RuPay card transactions as well as payments through the Unified Payments Interface (UPI), India's instant payment system launched in 2016.

The bank plans to "gradually" integrate additional features into the suite, stating that "HSBC will enable collaboration with fintech companies, support more digital acquiring capabilities and integrate with clients' broader cash management and liquidity solutions"

Georges Elhedery, Chief Executive of the HSBC Group $HSBA (-1,13 %)described Hong Kong as the Group's home market and an important growth market and expressed his firm conviction that the region would continue to play an important role as an international financial center in the future.

In an exclusive interview with Xinhua, Elhedery emphasized Hong Kong's role as a wealth management hub and "super-connector" - characteristics he described as the cornerstone of its status as a global financial centre.

The banker highlighted the region's unique access to mainland China. Through programs such as Stock Connect, Hong Kong offers by far the most attractive and comprehensive access to the world's second largest economy, while also serving as a bridge for capital from the mainland to the global market, he said.

The CEO pointed to an emerging trend in recent years whereby Hong Kong is increasingly becoming a hub for overseas investment by Chinese companies in markets such as ASEAN, the Middle East, Europe and the United States.

In particular, he predicted that the region is on track to become the largest cross-border wealth center by 2030, pointing out that HSBC has gained around 100,000 new clients per month over the past two years.

Elhedery's optimistic outlook is in line with Hong Kong's continued strong performance in the Global Financial Centers Index, where the region ranked third globally and first in the Asia-Pacific region. It is worth noting that the gap between Hong Kong and New York and London has narrowed.

Hong Kong has an open capital market, immigration and talent program that allows people from all over the world to settle here, which Elhedery says will undoubtedly cement its status as an international financial center.

For HSBC, Hong Kong is an important international hub, the CEO emphasized, as the group bases its global network in Hong Kong to support connections between its clients.

Regarding Hong Kong as an offshore renminbi center, Elhedery said the region is the right platform and the best hub as it understands not only the policy considerations but also the needs of international players.

"The developments so far are very encouraging. We expect even greater liquidity of the renminbi in Hong Kong," he said.

Hong Kong has also pushed ahead with the development of digital assets, and the Stablecoins Ordinance has come into force. Elhedery was encouraged by the regulatory developments as a sound regulatory framework is a prerequisite for the healthy growth of the digital asset sector.

Hong Kong has seen an increase in IPOs. The Hong Kong Stock Exchange reported 69 newly listed companies in the first nine months of 2025, an increase of 53 percent year-on-year.

"Looking at the pipeline, we expect this trend to continue for at least the next 12 months, if not longer," said the banker. "This shows once again why Hong Kong continues to be one of the most attractive international financial centers in the world."

September was the month in which my account shone like the last rays of summer sunshine! Why? The half-year bonus catapulted this month into the month with the highest income of all time. Of course, the money doesn't go into savings, but is put into the market the following month, because share price growth and dividends beat any consumption. There was also an unexpected refund from the dental supplement, which has already been reinvested. Who says that prophylaxis doesn't bring returns after all?

And what else? Business as usual: preparations for ice swimming started at the end of the month thanks to colder temperatures, daily sport and exercise, a nice community meeting of frugalists and investors. Yes, we talked about dividends rather than the latest fashion. Everything was rounded off with a donation. My portfolios went sideways, but did what they are supposed to do: Generate cash flow. And from this month onwards, there will be additional risk figures presented. A little growth and distribution. Time for a review!

Overall performance

This month was a typical month of consolidation for me. My investments moved sideways with only a very slight increase. Is this a good sign for a year-end rally? There was also an initial cut in the Fed's key interest rate. However, there were no major movements, and Q4 is more likely to be responsible for this. As always, income rained down on the account. My key performance indicators for my overall portfolio at a glance:

• TTWROR (month under review): +1,76 % (previous month: +1.01 %)
• TTWROR (since inception): +76,55 %
• IZF (month under review): +9,64 % (previous month: +12.50 %)
• IZF (since inception): +11,15 %
• Delta: +€615.12
• Absolute change: +€2,635.52

Performance & volume

The rise in the price of $AVGO (+2,71 %) allows my largest single share position to grow further and strengthens its dominance. And the class leader has not spilled the beans in terms of performance since purchase either: +337%! After the $BAC (-0,14 %) climbed into the top 5 by volume in the previous month, it remains in this group. The banks are currently doing well. Also$WMT (+0,35 %) The retail giant is a reliable dividend payer and an important pillar among my individual stocks. The competitor$TGT (+0,92 %) on the other hand, is the red lantern in my portfolio. Despite thefts and sales problems, I see a healthy business model. I am sure that this share will bounce back and continue to invest on a monthly basis.

Size of individual share positions by volume in the overall portfolio:

Share (%) of total portfolio and associated portfolio:

$AVGO (+2,71 %) 3.30 % (main share portfolio)

$NFLX (-2,67 %) 1.87 % (main share portfolio)

$WMT (+0,35 %) 1.74 % (main share portfolio)

$FAST (-0,45 %) 1.72 % (main share portfolio)

$BAC (-0,14 %) 1.49 % (main share portfolio)

Smallest individual share positions by volume in the overall portfolio:

Share (%) of the total portfolio and associated securities account:

$SHEL (-1,62 %) : 0.41 % (crypto follow-up portfolio)

$NOVO B (+0,63 %) 0.50 % (main share portfolio)

$TGT (+0,92 %) 0.55 % (crypto follow-on deposit)

$HSBA (-1,13 %) 0.58 % (main share portfolio)

$GIS (-0,03 %) 0.60 % (main share portfolio)

Top-performing individual stocks

Shares with performance since initial purchase (%) and the respective portfolio:

$AVGO (+2,71 %) a: +337 % (main share portfolio)

$NFLX (-2,67 %) : +153 % (main share portfolio)

$WMT (+0,35 %) : +78 % (main share portfolio)

$FAST (-0,45 %) +76 % (main share portfolio)

$SAP (+0,47 %) +75 % (main share portfolio)

Flop performer individual stocks

Shares with performance since initial purchase (%) and the respective portfolio:

$TGT (+0,92 %) : -38 % (main share portfolio)

$GIS (-0,03 %) -31 % (main share portfolio)

$NKE (+0,45 %) -27 % (main share portfolio)

$CPB (+0,5 %) -24 % (main share portfolio)

$UPS (+0,33 %) -24 % (main share portfolio)

Asset allocation

My asset allocation is as follows:

ETFs: 39.1%

Equities: 58.6%

Crypto: 2.2 %

P2P: less than 0.01 %

Investments and subsequent purchases

I have invested the following amounts in savings plans:

Planned savings plan amount from the fixed net salary: € 1,030

Planned savings plan amount from the fixed net salary, incl. reinvested dividends according to plan size: € 1,140

Savings ratio of the savings plans to the fixed net salary: 49.75

In addition, the following additional investments were made from returns, refunds, cashback, etc. as one-off savings plans/repurchases:

Subsequent purchases/one-off savings plans as cashback annuities from refunds: € 73.00

Subsequent purchases/non-recurring savings plans as cashback annuities from bonuses/incentives from the KK: € 0.00

Subsequent purchases from other surpluses: € 31.00

Automatically reinvested dividends by the broker: € 5.03 (function is only activated for an old custody account, as I otherwise prefer to control the reinvestment myself)

Additional purchases were made:

Number of additional purchases: 2

73.00 € for $TDIV (+0,02 %)

25.00 € for $ZPRG (-0,01 %)

Passive income from dividends

My income from dividends amounted to € 139.14 (€ 128.42 in the same month of the previous year). This corresponds to a change of -1.36% compared to the same month last year. The slight decrease is due to the fact that my large Vanguard ETFs postponed the distribution to the following month. The following are further key data on the distributions:

Number of dividend payments: 34

Number of payment days: 17 days

Average dividend per payment: € 4.09

average dividend per payment day: € 8.18

The top three payers are:

$ARCC (+0,78 %)

$UPS (+0,33 %)

$DXSA (-0,31 %)

My passive income from dividends (and some interest) mathematically covered 16.05% of my expenses in the month under review.

Crypto performance

My crypto portfolio ran sideways in September with highs and lows. The hope here lies more in the coming Q4. My key figures:

Performance in the reporting period: +8.66 %

Performance since inception: +135.10

Share of holdings for which the tax holding period has expired: 98.57 %.

Crypto share of the total portfolio: 2.20 %

I am vigilant with regard to crypto. The exit should continue. I don't want to provide the exit liquidity for the other market participants. There will be news in the following month.

Performance comparison: portfolio vs. benchmarks

A comparison of my portfolio with two important ETFs shows:

TTWROR (current month): +1,76 %

$VWRL (+0,32 %) : +2,63 %

$VUSA (+0,23 %) : +2,56 %

One possible explanation for the poorer performance compared to the index values could be a higher proportion of individual shares,

New: Risk indicators

Here are my key risk figures for the month under review (and in brackets YTD)

Maximum drawdown: 0.94% (17.17%)

Maximum drawdown duration: 19+ days (231+ days)

Volatility: 1.68% (11.51%)

Sharpe Ratio: 5.73 (0.29)

Semi-volatility: 1.21% (9.04%)

An extremely low drawdown of only 0.94% shows that your portfolio had hardly any fluctuations during the month. This is typical for a sideways phase or stable markets.

The YTD drawdown of 17.17% is no coincidence: Trump's tariffs have mainly affected consumer-related stocks such as $TGT (+0,92 %) have been hit. However, my focus on stable dividend payers and broad-based ETFs has limited the losses. The fact is, however, that Trump has put a dent in my figures.

Outlook

As you can see from the introduction, there were no highlights, but there were also no disasters for me to report on. So we're done for this month. Thanks for reading!

However, I still have some questions for you to improve my review:

Are you also interested in the performance and top/flop5 of my ETFs or cryptos? Then let me know in the comments and I'll include it in the coming months.

In my posts on Instagram and also here, I keep talking about my cashback pension. Would you like to know more about the concept, what's behind it for me and how it will supplement my "share and ETF pension"?

My review here on getquin includes additional key figures as well as those from my Instagram reviews. Would you also like to see more from the budget review of my private finances included here as a little extra?

👉 Would you like to view my review as an Instagram Carousel post?

Then follow me on Instagram:

📲 There's also 3 posts a week in addition to the portfolio and budget review: @frugalfreisein

Please pay close attention to the spelling, unfortunately there are too many fake and phishing accounts on social media. I have also been "copied" several times now.

👉 How was your month in the portfolio? Do you have any tops and flops to report?

Leave your thoughts in the comments!