Company Reports

HSBC's second-quarter pretax profit, excluding notable items, rose 13% year on year, supported by stronger banking net interest income and wealth fee income. Annualized return on tangible equity reached 19.5%. HSBC also announced a USD 1 billion share buyback.

HSBC is nearing the end of a multiyear restructuring aimed at simplifying its footprint, reducing costs, and exiting underperforming businesses. The group has substantially unwound acquisitions made in the early 2000s that diluted returns, particularly in markets such as the US where it lacked scale and faced higher regulatory costs. More recently, HSBC has sharpened its geographic focus toward Hong Kong and the UK—its two core markets where it benefits from leading deposit franchises and strong brand recognition. We view this pivot as strategically sound, as scale in these markets underpins a structurally low-cost funding base and supports more resilient profitability. The acquisition of the remaining shares in Hang Seng Bank is expected to further enhance capital flexibility and strengthen HSBC’s position in Hong Kong.

HSBC has agreed to sell its AUD 36 billion Australian home and personal loan portfolio to Blackstone, with completion expected in the first half of 2027. The consideration comprises the portfolio value plus eligible originations from Jan. 31 to Aug. 14, 2026.

HSBC announced the sale of HSBC Life (Singapore) to Allianz for USD 2.1 billion. Upon completion, expected in the first half of 2027, HSBC will enter into a 15-year bancassurance distribution agreement with Allianz. The deal is expected to add 15 basis points to HSBC's common equity Tier 1 ratio.

HSBC is nearing the end of a multiyear restructuring aimed at simplifying its footprint, reducing costs, and exiting underperforming businesses. The group has substantially unwound acquisitions made in the early 2000s that diluted returns, particularly in markets such as the US where it lacked scale and faced higher regulatory costs. More recently, HSBC has sharpened its geographic focus toward Hong Kong and the UK—its two core markets where it benefits from leading deposit franchises and strong brand recognition. We view this pivot as strategically sound, as scale in these markets underpins a structurally low-cost funding base and supports more resilient profitability. The acquisition of the balance of shares in Hang Seng Bank is expected to further enhance capital flexibility and strengthen HSBC’s positioning in Hong Kong.

During their investor days on May 19-21, HSBC and Standard Chartered outlined medium-term strategies. Key themes include capturing Asian wealth growth, leveraging cross-border network connectivity, and driving efficiency through technology.

HSBC's first-quarter return on tangible equity excluding notable items increased 0.3 percentage points year on year to 18.7%. Core profit before tax was flat year on year at USD 10.1 billion, as higher revenue was offset by increased credit costs.

HSBC is near the tail end of its restructuring programs, which were aimed at cutting costs and exiting operations in underperforming regions. The group has unwound acquisitions and operations made in the early 2000s that had narrowed group returns, given a lack of scale in markets such as the US and higher regulatory costs.

Excluding notable items, HSBC's 2025 returns on tangible equity, or ROTE, improved to 17% from 16% in 2024, as 7% pretax profit growth was supported by resilient net interest income and strong net fee income growth. Dividends per share grew 14% to USD 0.75.

HSBC is near the tail end of its restructuring programs, which were aimed at cutting costs and exiting operations in underperforming regions. To recap, the group has unwound acquisitions and operations made in the early 2000s that had narrowed group returns, given a lack of scale in markets such as the US and higher regulatory costs.

HSBC has announced the appointment of Brendan Nelson as group Chair. Nelson has been on HSBC's board since September 2023 and served as the interim chair since October 2025.

HSBC's third-quarter results reflected resilient net interest margins, leading to more optimism in the company's guidance for net interest income and returns on tangible equity.

HSBC has evolved from a global bank into a more geographically focused group centered mainly on Asia and the UK, with a few other strong regions such as the Middle East. After the 2008 global financial crisis, stricter regulations globally (the Basel III framework) and specifically in the UK have made it more difficult to generate excess normalized returns from a global footprint, in our view, as regulators in each jurisdiction demand that significant capital be allocated locally, to protect local depositors and the governments that insure them.

HSBC has evolved from a global bank, where two decades ago half of its capital was deployed outside the United Kingdom and Hong Kong, to a somewhat more geographically focused group centered mainly on these two markets, with a few other strong geographies such as the Middle East. After the 2008 global financial crisis, stricter regulations both globally (the Basel III framework) and specifically in the UK have made it more difficult to generate excess normalized returns from a global footprint, in our view, as regulators in each jurisdiction demand that significant capital be allocated locally, to protect local depositors and the governments that insure them.

HSBC has evolved from a global bank, where two decades ago half of its capital was deployed outside the United Kingdom and Hong Kong, to a somewhat more geographically focused group centered mainly on these two markets, with a few other strong geographies such as the Middle East. After the 2008 global financial crisis, stricter regulations both globally (the Basel III framework) and specifically in the UK have made it more difficult to generate excess normalized returns from a global footprint, in our view, as regulators in each jurisdiction demand that significant capital be allocated locally, to protect local depositors and the governments that insure them.

HSBC has announced plans to acquire the 37% of Hang Seng Bank it does not already own for HKD 155 per share—a 33% premium to the 30-day average price and a 38% premium to our fair value estimate for Hang Seng prior to the acquisition announcement.

HSBC has evolved from a global bank, where two decades ago half of its capital was deployed outside the United Kingdom and Hong Kong, to a somewhat more geographically focused group centered mainly on these two markets, with a few other strong geographies such as the Middle East. After the 2008 global financial crisis, stricter regulations both globally (the Basel III framework) and specifically in the UK have made it more difficult to generate excess normalized returns from a global footprint, in our view, as regulators in each jurisdiction demand that significant capital be allocated locally, to protect local depositors and the governments that insure them.

HSBC’s annualized return on tangible equity was 11.4% in the second quarter, or 17.7% excluding a $2.1 billion noncash loss on Bank of Communications—$1.1 billion from dilution due to government capital injections and $1.0 billion in impairments—plus other notable items.

HSBC announced first-quarter net profit 23% above company-compiled consensus and a $3 billion buyback, around 1.5% of market cap. The bank's management outlined a "plausible downside" tariff scenario of a low-single-digit percentage revenue impact and $500 million in added credit cost.

HSBC has evolved from a global bank, where two decades ago half of its capital was deployed outside the United Kingdom and Hong Kong, to a somewhat more geographically focused group centred mainly on these two markets, with a few other strong geographies such as the Middle East. After the 2008 global financial crisis, stricter regulations both globally (the Basel III framework) and specifically in the UK have made it more difficult to generate excess normalized returns from a global footprint, in our view, as regulators in each jurisdiction demand that significant capital be allocated locally, to protect local depositors and the governments that insure them.