HSBC shares slide as customers shift into higher-rate time deposits

what happened

Shares of HSBC Holdings dropped as much as 7% on Tuesday after the bank reported third-quarter net interest income 2% below forecasts, according to Dow Jones Newswires. The lender said clients keep moving money into higher-yielding time deposits. In Hong Kong, that share reached 38% of deposits, close to the historical peak of roughly 40%.

CFO Pam Kaur told analysts that deposit shifts typically follow higher rates. The U.K. business shows the same pattern, though HSBC has chosen not to match the most attractive rates there in order to protect margins. Neither Kaur nor the analysts on the call linked the trend to AI agents.

Despite the selloff, HSBC kept its guidance for the current year, 2027 and 2028 and announced buybacks of up to $1 billion.

why it matters

When customers move into higher-yielding deposits, banks pay more to attract funding and their net interest margins narrow, so the trend matters across the banking sector. Investors will focus on how well the bank can hold deposits without costlier funding.

market impact

HSBC shares: weaker-than-expected interest income and deposit shift weigh on the stock

• ▼HSBC shares pressure down — interest income below forecast and a rising share of higher-rate time deposits

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