HSBC Reports Strong 2025 Results and Raises Medium-Term Profitability Targets Through 2028

HSBC Reports Strong 2025 Results and Raises Medium-Term Profitability Targets Through 2028

(IN BRIEF) HSBC reported strong underlying financial performance in 2025 with revenue rising to $68.3 billion and profit before tax reaching $29.9 billion despite significant one-off charges. Excluding notable items, profit before tax increased to $36.6 billion and return on tangible equity reached 17.2 percent, reflecting strong growth in wealth management and transaction banking. The bank increased lending and deposits while maintaining a CET1 capital ratio of 14.9 percent and raising its dividend to $0.75 per share for the year. Looking ahead, HSBC targets a return on tangible equity of at least 17 percent annually from 2026 to 2028 and expects continued revenue growth supported by disciplined cost management and ongoing strategic simplification.

(PRESS RELEASE) LONDON, 25-Feb-2026 — /EuropaWire/ — HSBC reported solid financial results for 2025, supported by strong performance across all four of its business divisions and continued progress in executing its strategic transformation. The bank delivered reported profit before tax of $29.9 billion and profit after tax of $23.1 billion, reflecting the impact of significant one-off items during the year. Excluding these notable items, profit before tax rose to $36.6 billion on a constant currency basis, demonstrating strong underlying growth.

Group CEO Georges Elhedery highlighted that 2025 marked a period of decisive implementation and operational momentum, with the bank strengthening its position through disciplined execution and focused investment. HSBC is aiming to build a simpler and more agile organization while continuing to expand revenue and shareholder returns. The bank has raised its medium-term ambition and is now targeting a return on tangible equity (RoTE) of at least 17 percent annually from 2026 through 2028, excluding notable items, alongside steady revenue growth that is expected to reach 5 percent by 2028.

Reported profit before tax declined by $2.4 billion compared with 2024, largely reflecting a net adverse impact of $4.9 billion from notable items. These included impairment and dilution losses related to Bank of Communications Co., Limited totaling $2.1 billion, reserve recycling losses of $1.5 billion following the sale of a retained French loan portfolio, legal provisions of $1.4 billion, and $1.0 billion in restructuring costs associated with organizational simplification. Profit after tax fell by $1.9 billion year-on-year.

Revenue increased by 4 percent to $68.3 billion, driven primarily by growth in wealth management activities and transaction banking services. Fee income rose in areas such as investment distribution and insurance, while foreign exchange activities contributed to growth within Corporate and Institutional Banking. Excluding notable items and currency effects, revenue increased to $71.0 billion.

Net interest income reached $34.8 billion, rising by $2.1 billion from the previous year. The increase was supported by higher yields on reinvested structural hedges, deposit growth, and improved treasury income. Net interest margin improved slightly to 1.59 percent. Banking net interest income, which excludes trading book funding costs, totaled $44.1 billion.

Adjusted performance contributed to a return on tangible equity of 13.3 percent for the year, compared with 14.6 percent in 2024. Excluding notable items, RoTE improved to 17.2 percent, reflecting stronger underlying profitability.

Expected credit losses totaled $3.9 billion, an increase of $0.4 billion compared with 2024. The rise reflected increased provisions related to commercial real estate exposures in Hong Kong, although charges in mainland China declined year-on-year. Credit impairment charges represented 39 basis points of average gross loans.

Operating expenses rose by $3.4 billion to $36.4 billion. The increase included $3.0 billion in notable items such as legal provisions, restructuring costs, and expenses related to acquisitions and disposals. Additional cost increases reflected technology investments, higher performance-related compensation, and inflationary pressures, partially offset by savings from organizational simplification. Excluding notable items, operating expenses grew by approximately 3 percent, consistent with the bank’s cost discipline targets.

Customer lending balances increased by $57.7 billion, including favorable currency effects, with underlying growth driven primarily by mortgage and commercial lending in the United Kingdom. Customer deposits rose by $131.9 billion, reflecting broad-based growth across all business areas, particularly in Hong Kong.

HSBC maintained a Common Equity Tier 1 capital ratio of 14.9 percent, supported by capital generation that offset increases in risk-weighted assets driven by currency movements and balance sheet growth.

The Board approved a fourth interim dividend of $0.45 per share, bringing total dividends for 2025 to $0.75 per share.

Fourth Quarter Performance

For the fourth quarter of 2025, reported profit before tax increased to $6.8 billion, up $4.5 billion compared with the same period in 2024. The improvement reflected a favorable year-on-year impact from notable items, as well as growth in net interest income and lower credit impairment charges. Profit after tax rose to $5.2 billion.

Quarterly revenue reached $16.4 billion, an increase of $4.8 billion year-on-year. Excluding notable items and currency effects, revenue increased to $17.7 billion. Expected credit losses declined to $0.9 billion, reflecting improved performance in wholesale lending exposures. Operating expenses for the quarter increased to $9.3 billion due to restructuring costs, technology investment, and inflationary pressures.

Outlook

HSBC expects continued growth and stable financial performance over the coming years. The bank is targeting a RoTE of 17 percent or higher between 2026 and 2028, excluding notable items, and expects steady revenue growth over the same period.

For 2026, HSBC expects banking net interest income of at least $45 billion based on current interest rate expectations. Expected credit losses are projected to represent around 40 basis points of average gross loans, remaining within the medium-term planning range of 30 to 40 basis points.

Operating expense growth is expected to remain tightly controlled, with target basis operating expenses projected to increase by approximately 1 percent compared with 2025.

HSBC plans to maintain its dividend payout ratio target at 50 percent of earnings per share, excluding notable items. The bank intends to manage its CET1 capital ratio within its medium-term target range of 14 percent to 14.5 percent. Capital levels may temporarily fall below this range following the privatisation of Hang Seng Bank in early 2026, but the bank expects to restore the ratio through capital generation and disciplined capital management before resuming share buybacks.

The bank’s financial targets reflect current expectations for macroeconomic conditions, interest rates, foreign exchange markets, and customer activity levels.

For further information contact:

Media Relations
UK – HSBC Group Press Office
Telephone: +44 (0)20 7991 8096
Email: pressoffice@hsbc.com

Hong Kong – Aman Ullah
Telephone: +852 3941 1120
Email: aspmediarelations@hsbc.com.hk

Investor Relations
UK – Alastair Ryan
Telephone: +44 (0)7468 703 010
Email: investorrelations@hsbc.com

Hong Kong – Yafei Tian
Telephone: +852 2899 8909
Email: investorrelations@hsbc.com.hk

Read the announcement in full: HSBC Holdings plc Annual Results (PDF 1MB)

SOURCE: HSBC