HSBC Holdings plc released an update regarding ongoing litigation initiated by Herald Fund SPC against HSBC Securities Services Luxembourg (HSSL) in relation to the Bernard L. Madoff Investment Securities LLC fraud. The Luxembourg Court of Cassation denied HSSL’s appeal concerning restitution of securities but accepted its appeal on the restitution of cash. HSSL plans to pursue a second appeal before the Luxembourg Court of Appeal.

Should HSSL not succeed in the second appeal, the amount it may be required to pay will be addressed in subsequent proceedings. As a result of this development, HSBC Holdings plc will recognize a US$1.1bn provision in its consolidated financial results for the third quarter of 2025, representing an approximate 15 basis points impact on the Group’s CET1 capital ratio. Because of the uncertainties surrounding the final resolution, the financial impact could differ significantly. HSBC’s Q325 results are scheduled to be released on 28 October 2025.