HSBC Holdings plc Earnings Recaps
HSBC shares fell 5.3% after the results, suggesting investors focused on pressure beneath the headline growth: IWPB revenue declined slightly, Hong Kong time-deposit margins came under pressure, and U.K. deposit competition intensified. Management held guidance unchanged, but banking NII growth also included one-off and other temporary benefits.
Key takeaways
- Revenue rose 5% to $18.7 billion and profit before tax increased 10% to $10 billion, both excluding notable items; notable items reduced quarterly profit by $0.4 billion.
- Banking NII increased $0.6 billion year on year to $11.7 billion. The quarter-on-quarter increase included $0.1 billion each from one-offs, the structural hedge and day count; full-year guidance remains at least $46 billion.
- IWPB revenue fell slightly. Management cited strategic transactions and the non-recurrence of about $0.1 billion in prior-year insurance benefits; Asset Management growth was offset by margin compression.
- Credit guidance remains around 45 basis points for 2026 after a third-quarter ECL charge of $0.8 billion, or 31 basis points annualized. Cost growth was 1% year on year on a target basis, with the 2026 target unchanged.
- Wealth net new money in Asia was $38 billion in the quarter and more than $95 billion year to date; deposits increased $105 billion over 12 months, including held-for-sale balances.
HSBC Holdings plc delivered a robust performance in Q3, reporting revenues of $17.9 billion and an annualized RoTE of 17.6% year-to-date, underscoring strong operational momentum and strategic execution.
Key takeaways
- Total revenues increased by $500 million year-over-year, with banking NII reaching $11 billion, reflecting effective deposit growth.
- Wealth management showed impressive growth with a 29% rise in fee and other income, contributing to total invested assets of $1.5 trillion.
- The strategic decision to privatize Hang Seng Bank is expected to create operational efficiencies and align with HSBC’s growth objectives, while capitalizing on the positive outlook for Hong Kong.
- The bank is on track for a 50% dividend payout ratio by 2025, maintaining a CET1 capital ratio of 14.5% amidst ongoing cost management efforts.
- HSBC continues to exit nonstrategic markets, announcing exits in Malta and Sri Lanka, bringing the total for the year to 11.
HSBC Holdings plc reported a strong first half in 2025, with revenue growth of 6% to $35.4 billion and profit before tax rising by 5% to $18.9 billion, demonstrating solid momentum across its core businesses.
Key takeaways
- Annualized return on tangible equity increased to 18.2%, up 1.2% year-on-year, reflecting strong financial performance.
- Deposits grew by $83 billion year-over-year, supported by robust customer acquisition of 100,000 new-to-bank customers monthly in Hong Kong.
- A $0.10 dividend per share and a $3 billion share buyback were announced, totaling $9.5 billion in shareholder distributions for the half year.
- HSBC is on track to achieve approximately $1.5 billion in cost savings by 2026 as part of its organizational simplification efforts.
- Continued investment in Wealth and Corporate Banking segments, including the opening of new wealth centers and innovative financial solutions, enhancing customer engagement and market positioning.