HSBC Holdings plc reported its interim results for the first half of 2025, showing a decline in profit before tax and revenue compared to the same period last year. The group cited dilution and impairment losses related to its associate Bank of Communications Co., Limited (BoCom) and the absence of gains from prior business disposals as primary factors behind the decrease.
Georges Elhedery, Group CEO, stated: “We’re making positive progress in becoming a simple, more agile, focused organisation built on our core strengths. In the first half, we continued to execute our strategy with discipline and each of our four businesses sustained momentum in their earnings with each growing revenue. This gives us confidence in our ability to deliver our targets. We continue to navigate this period of economic uncertainty and market volatility from a position of strength, putting the changing needs of our customers at the heart of everything we do.”
For the first half of 2025, HSBC’s profit before tax was $15.8 billion, down by $5.7 billion compared to the same period in 2024. This drop was largely due to $2.1 billion in losses associated with BoCom and the non-recurrence of $3.6 billion in net gains from the disposal of its Canadian and Argentine banking businesses last year. Profit after tax stood at $12.4 billion, which is 30% lower than last year.
Excluding notable items and on a constant currency basis, profit before tax increased by $0.9 billion to $18.9 billion over 1H24, driven by strong performance in wealth management—particularly within International Wealth and Premier Banking (IWPB) and Hong Kong segments—and growth in Foreign Exchange and Debt and Equity Markets amid volatile conditions.
Revenue for 1H25 decreased by $3.2 billion or 9% year-on-year to $34.1 billion, mainly due to notable items from previous business disposals. When excluding these items, revenue rose primarily due to fee income growth in Wealth and market activities.
Net interest income fell by $0.1 billion compared with last year but increased on a constant currency basis due to structural hedging benefits offsetting reductions from business disposals and lower market rates.
The group’s annualised return on average tangible equity (RoTE) was 14.7%, down from 21.4% a year earlier; excluding notable items it was 18.2%, up by 1.2 percentage points.
Expected credit losses (ECL) rose by $0.9 billion to reach $1.9 billion for the half-year period, including charges tied to Hong Kong commercial real estate exposures amid continued downward pressure on property values as well as allowances reflecting broader geopolitical uncertainty.
Operating expenses increased by 4% to $17 billion versus last year due to restructuring costs linked with organisational simplification efforts and higher technology investments; these were partly offset by cost reductions following recent divestments.
Customer lending balances grew by $51 billion since December 2024—including favourable foreign exchange movements—with most growth occurring in HSBC’s UK business segment on a constant currency basis.
Customer accounts also rose by $64 billion since December but saw an underlying decrease when adjusted for currency effects due mainly to deposit reclassifications tied to held-for-sale assets—especially its German custody business—and outflows from Corporate and Institutional Banking (CIB) clients in the UK.
The bank’s common equity tier 1 (CET1) capital ratio declined slightly from December levels due primarily to increases in risk-weighted assets driven by currency changes and asset size expansion.
HSBC’s Board has approved a second interim dividend of $0.10 per share along with plans for a share buy-back program up to $3 billion expected for completion before third quarter results are announced.
In its outlook statement, HSBC highlighted ongoing global uncertainty affecting economic forecasts but said it remains positioned well for managing such challenges while maintaining focus on customer outcomes.
The bank reiterated targets including mid-teens RoTE through 2027 (excluding notable items), banking net interest income around $42bn for full-year 2025 based on current models factoring foreign exchange trends and rate changes such as HIBOR declines seen during Q2.
It expects ECL charges as a percentage of average gross loans at about 40bps this year given persistent pressures in Hong Kong commercial real estate markets.
Cost control measures remain on track with targeted operating expense growth around 3% over last year; demand for lending is expected to stay muted through year-end though medium-term projections see mid-single digit percentage growth annually.
Fee income from wealth management is projected for double-digit average annual growth over coming years.
The group intends to manage CET1 within a target range between 14%–14.5%, maintaining a dividend payout ratio target basis at about 50% for this fiscal year excluding major exceptional items.
For further details readers can refer directly to HSBC's Interim Report 2025 or contact Investor Relations or Media Relations representatives listed in the announcement.
Read the full media release: HSBC Holdings plc Interim Results 2025