HSBC: BoComm, French Sale, Legal Costs Drive Lower Profit
London-headquartered HSBC saw profits shrink due to a series of notable items but it remains confident in the outlook and revised its targets upwards.
HSBC’s profit after tax in 2025 totalled $29.9 billion, according to the bank’s financial results, which was $2.4 billion lower compared to 2024.
Revenue increased 4 percent to $68.3 billion with growth from fee and other income in the bank's wealth and wholesale transaction banking business.
However, this was more than offset by $3 billion of notable items, including dilution and impairment losses of $2.1 billion related to associate Bank of Communications, reserve recycling losses of $1.5 billion linked to the sale of French assets, $1.4 billion of legal provisions and $1 billion of reorganization costs. Overall, operating expenses rose 10 percent to $36.4 billion.
Upward Target Revision
Despite the profit drop, HSBC remains confident in its underlying performance with the upward revision of its target of achieving 17 percent return on tangible equity (RoTE) or better for 2026, 2027 and 2028, which the bank said reflects earnings momentum and positive progress in its strategic execution. It is also aiming for year-on-year growth in revenue from 2026 to 2028 on a constant curency basis, rising to 5 percent in 2028, while excluding notable items.
For 2026, the bank expects net interest income of at least $45 billion, expected credit losses of around 40 basis points and growth in target basis operating expenses of approximately 1 percent compared with 2025.
«We are becoming a simple, more agile, focused bank, one that moves with the speed our customers need to navigate the modern world. We are delivering growth, investing for growth and we are executing our strategy with discipline and precision. That gives us confidence in our ability to continue delivering for our shareholders,» said HSBC CEO Georges Elhedery.
