HSBC reports $29.9bn profit before tax in 2025; sets 2026–28 targets

2025 was a year of decisive action and swift execution, as reflected in our robust performance. Each of our four businesses performed strongly, and we have strong momentum across the bank.

Accordingly, we are raising our ambition and targeting a return on tangible equity (RoTE) of 17% or better, excluding notable items, in each year from 2026 to 2028. We are also targeting year-on-year revenue growth over the same period on the same basis, rising to 5% in 2028.

We are becoming a simpler, more agile and focused bank—one that moves at the pace our customers require to navigate the modern world. We are delivering growth, investing for growth, and executing our strategy with discipline and precision. This gives us confidence in our ability to continue delivering for our shareholders.

• Reported profit before tax declined by $2.4bn to $29.9bn, primarily due to a $4.9bn year-on-year net adverse impact from notable items.
  Profit after tax decreased by $1.9bn to $23.1bn.
• Notable items (2025) included:
• • dilution and impairment losses of $2.1bn related to associate Bank of Communications Co., Limited (BoCom)
  • reserve recycling losses of $1.5bn following the sale of the French retained portfolio of home and certain other loans
  • legal provisions of $1.4bn
  • restructuring and related costs of $1.0bn linked to organisational simplification
    Notable items (2024) included net losses of $1.4bn relating to disposals in Canada and Argentina.
• Constant currency profit before tax excluding notable items rose by $2.4bn to $36.6bn, driven by Wealth (International Wealth and Premier Banking and Hong Kong) and Wholesale Transaction Banking in Corporate and Institutional Banking (CIB). This was partly offset by higher expected credit losses (ECL) and higher operating expenses due to planned investment and inflation.
• RoTE (reported) was 13.3% (2024: 14.6%).
  RoTE excluding notable items was 17.2%, up 1.6 percentage points year-on-year.
• Revenue of $68.3bn rose by $2.4bn (4%), chiefly due to higher fee and other income in Wealth (investment distribution and insurance) and in Wholesale Transaction Banking, particularly foreign exchange in CIB. This was partly offset by the year-on-year impact of notable items.
  Constant currency revenue excluding notable items rose by $3.4bn to $71.0bn.
• Net interest income (NII) of $34.8bn was $2.1bn higher, reflecting reinvestment of the structural hedge at higher yields, deposit balance growth and higher NII in Markets Treasury, plus the non-recurrence of a $0.2bn loss in 2024 on early redemption of legacy securities. This was partly offset by a $1.6bn adverse year-on-year impact from disposals in Argentina and Canada and margin compression on deposits.
  Banking NII (excluding trading book funding costs) increased by $0.3bn to $44.1bn.
• Net interest margin (NIM) was 1.59%, up 3 basis points.
• ECL were $3.9bn, up $0.4bn. The Hong Kong CRE charge rose to $0.7bn (2024: $0.1bn), while mainland China CRE charges were $0.2bn (2024: $0.4bn). ECL were 39 bps of average gross loans (including held-for-sale balances).
• Operating expenses rose by $3.4bn (10%) to $36.4bn, mainly reflecting $3.0bn of notable items (including legal provisions, restructuring and disposal/wind-down-related costs).
  On a target basis, operating expenses increased by 3%, in line with the cost growth target, driven by planned technology investment, higher performance-related pay, and inflation, partly offset by simplification savings.
• Customer lending balances rose by $57.7bn (including FX translation); on a constant currency basis, up $17.6bn, mainly in the UK (mortgages and commercial lending).
• Customer accounts rose by $131.9bn (including FX translation); on a constant currency basis, up $67.6bn, with growth across all businesses, particularly Hong Kong.
• CET1 ratio was 14.9%, with higher RWAs offset by CET1 capital generation net of distributions.
• The board approved a fourth interim dividend of $0.45 per share, taking the total for 2025 to $0.75 per share.
• Reported profit before tax rose by $4.5bn to $6.8bn, including a $3.3bn net favourable impact from notable items (notably the non-recurrence of reserve recycling losses linked to the Argentina sale in 4Q24, partly offset by reserve recycling losses linked to the French retained portfolio sale in 4Q25).
  Reported profit after tax rose by $4.6bn to $5.2bn.
• Revenue rose by $4.8bn (42%) to $16.4bn, including a $3.6bn year-on-year impact from notable items. Constant currency revenue excluding notable items rose by $1.0bn to $17.7bn.
• ECL fell by $0.5bn to $0.9bn, mainly due to lower wholesale exposure charges.
• Operating expenses rose by $0.7bn (8%) to $9.3bn, reflecting notable items and higher planned spend/investment, partly offset by simplification benefits.

Group financial targets:

• RoTE of 17% or better in 2026, 2027, and 2028, excluding notable items.
• Year-on-year revenue growth (excluding notable items, constant currency), rising to 5% growth in 2028 versus 2027.
• Maintain dividend payout ratio target basis of 50% in 2026–2028.

In respect of 2026

• Expect banking NII of at least $45bn, based on current expectations for policy rates.
• Expect ECL at around 40 bps of average gross loans in 2026 (including held-for-sale balances); medium-term planning range remains 30–40 bps.
• Target around 1% growth in target-basis operating expenses versus 2025.
• Intend to manage CET1 within the 14%–14.5% medium-term target range. CET1 may fall below the range in January 2026 due to the privatisation of Hang Seng Bank (net CET1 impact 110 bps in January 2026, based on CET1 as at 31 December 2025).
• Plan to restore CET1 to target range through organic capital generation and not initiating further buy-backs until CET1 is back within, or above, the range.