Core Viewpoint - The report from Industrial Securities upgrades HSBC Holdings (00005) rating to "Buy," forecasting a net interest income of at least $45 billion for the banking business in 2026, with an average tangible equity return of no less than 17% from 2026 to 2028 [1] Group 1: Financial Performance - In 2025, the company's reported pre-tax profit decreased by $2.4 billion to $29.9 billion compared to 2024, while the post-tax profit was $23.1 billion, down $1.9 billion from 2024. Excluding notable items at fixed exchange rates, the pre-tax profit increased by $2.4 billion to $36.6 billion [1] - The net interest income for 2025 was $34.8 billion, an increase of $2.1 billion from 2024, with a net interest margin of 1.59%, up 3 basis points year-on-year [2] - In Q4 2025, the company's revenue grew by 42% to $16.4 billion, driven by growth in net interest income and wealth management fees, while expected credit losses decreased by $0.5 billion to $0.9 billion [3] Group 2: Capital and Risk Management - The expected credit loss (ECL) for 2025 is projected at $3.9 billion, an increase of $0.4 billion from 2024, with ECL representing 39 basis points of the average loan portfolio [2] - The company's common equity tier 1 capital ratio for 2025 is 14.9%, and the average tangible equity return, excluding notable items, is 17.2%, an increase of 1.6 percentage points from 2024 [2] - The company plans to maintain a common equity tier 1 capital ratio between 14% and 14.5% in the medium term, with a projected net impact of 110 basis points from the privatization of Hang Seng Bank on common equity and capital by January 2026 [1]

Core Viewpoint - HSBC Holdings reported a decline in revenue and net profit for the first half of 2025, primarily due to the absence of gains from the sale of its Canadian and Argentine businesses in the previous year, alongside significant impairment losses related to its associate, Traffic Bank [1][2]. Financial Performance - The group achieved revenue of $34.1 billion, a decrease of 9% year-on-year, and a net profit of $12.4 billion, down 30% from the previous year [1]. - Excluding notable items, revenue increased by $1.9 billion to $35.4 billion, reflecting growth in wealth management, foreign exchange, and debt and equity markets [1]. - Net interest income decreased by $100 million, impacted by a $400 million adverse currency translation effect, but increased on a constant currency basis due to structural hedging benefits and lower funding costs [2]. Business Segments - The international wealth management and premier wealth management segments showed strong performance, with a 22% increase in revenue on a constant currency basis, contributing to a net new investment asset inflow of $44 billion, of which $27 billion came from Asia [2]. - Corporate and institutional banking fees and other income increased by 18% on a constant currency basis, with over 40% of the growth coming from wholesale trading [3]. Shareholder Returns - The strong performance allowed the company to declare a second interim dividend of $0.10 per share and initiate a share buyback of up to $3 billion, returning a total of $9.5 billion to shareholders through dividends and buybacks in the first half of 2025 [3].