2026-02-25 04:00Financial Performance - In 2025, HSBC reported a pre-tax profit of $29.9 billion, a decrease of $2.4 billion compared to 2024, primarily due to adverse impacts from notable items totaling $4.9 billion[5]. - The average tangible equity return for 2025 was 13.3%, down from 14.6% in 2024, while the return excluding notable items increased to 17.2%, up 1.6 percentage points from the previous year[5]. - Total revenue for 2025 increased by $2.4 billion to $68.3 billion, reflecting a growth rate of 4%, driven mainly by wealth management and wholesale banking businesses[5]. - The adjusted pre-tax profit increased by $4.5 billion to $6.8 billion, reflecting a net positive impact of $3.3 billion from notable items year-on-year[8]. - Revenue rose by $4.8 billion to $16.4 billion, a 42% increase, including a $3.6 billion year-on-year impact from notable items[8]. - The pre-tax profit for 2025 was $29,907 million, a decrease of 7.3% from $32,309 million in 2024[54]. - The profit for the year ending December 31, 2025, was reported at $23.131 billion, compared to $24.999 billion for the year ending December 31, 2024, indicating a decrease of about 3.5%[49][50]. Revenue and Income - Net interest income rose to $34.8 billion, an increase of $2.1 billion, benefiting from higher reinvestment yields and growth in deposit balances[5]. - Total operating income before expected credit losses was $68,274 million in 2025, compared to $65,854 million in 2024, indicating an increase of approximately 2.1%[44]. - The total revenue for 2025 was reported at $68.27 billion, an increase from $65.85 billion in 2024[79]. Customer and Loan Growth - Customer loans increased by $57.7 billion, with a fixed exchange rate basis showing a rise of $17.6 billion, primarily from growth in UK mortgages and commercial loans[5]. - Customer accounts grew by $131.9 billion, with a fixed exchange rate basis reflecting an increase of $67.6 billion across all business segments, particularly in Hong Kong[5]. - Net customer loans amounted to $988,399 million, up from $930,658 million, representing a growth of 6.2%[10]. Operating Expenses - Operating expenses rose by $3.4 billion to $36.4 billion, a 10% increase, influenced by notable items and investments in technology[5]. - Operating expenses increased by $700 million to $9.3 billion, an 8% rise, influenced by restructuring costs related to organizational simplification[8]. - The total operating expenses for 2025 were $36,428 million, compared to $33,043 million in 2024, representing an increase of about 10.8%[44]. Dividends and Shareholder Returns - The board approved a fourth interim dividend of $0.45 per share, totaling $0.75 per share for 2025[5]. - The board approved a quarterly dividend of $0.45 per share, totaling $0.75 per share for 2025, alongside a $6 billion share buyback program[17]. - The total dividends paid to shareholders amount to $12.764 billion in 2025, compared to $16.410 billion in 2024, with a total dividend per share of $0.66 for 2025[72]. Credit Losses - Expected credit losses for 2025 were $3.9 billion, an increase of $0.4 billion from 2024, reflecting provisions related to the commercial real estate sector in Hong Kong and mainland China[5]. - Expected credit losses decreased by $500 million to $900 million, primarily due to a decline in expected credit losses in wholesale lending[8]. - Expected credit losses and other credit impairment charges totaled $3,850 million in 2025, up from $3,414 million in 2024, marking an increase of approximately 12.8%[44]. Capital and Ratios - The common equity tier 1 capital ratio remained stable at 14.9%, consistent with the previous year[11]. - The leverage ratio decreased to 5.3% from 5.6%, indicating a reduction in leverage[11]. - The cost-to-income ratio for 2025 is projected at 53.4%, up from 50.2% in 2024[9]. Strategic Goals and Future Outlook - HSBC has raised its targets for 2026 to 2028, aiming for an average tangible equity return of 17% or higher and a revenue growth target of 5% by 2028[5]. - The company aims to achieve an annualized cost saving of $1.5 billion through organizational restructuring, with a target completion date six months ahead of schedule by June 2026[17]. - The company plans to maintain a common equity tier 1 capital ratio target range of 14% to 14.5%[8]. Economic and Market Conditions - Global economic growth in 2025 exceeded expectations, with strong trends in AI capital spending and trade growth, positioning the company to capture significant opportunities[16]. - In China, economic growth is expected to be maintained, with a focus on enhancing domestic demand and consumption[22]. - The company anticipates global economic expansion in 2026, supported by new trade corridors and increased demand for AI hardware[22]. Legal and Regulatory Matters - HSBC is involved in multiple lawsuits related to alleged violations of antitrust laws concerning the determination of the London Interbank Offered Rate (LIBOR), with unspecified damages sought[93]. - HSBC has reached an agreement with the French financial prosecutor, paying €302 million to resolve tax fraud allegations, concluding the investigation against its UK operations[97]. - The company recognized a provision of $1.1 billion related to the Madoff securities fraud case, with ongoing litigation involving claims totaling $508 million plus interest[88]. Environmental and Social Governance - The company is committed to becoming a net-zero emissions bank by 2050, with a focus on supporting clients in their transition[19]. - Management emphasizes the importance of environmental, social, and governance (ESG) measures in achieving corporate goals and commitments[122].