2026-02-25 14:00Financial Performance - Group revenue for 2025 was $71 billion, representing a 5% year-on-year growth, with profit before tax at $36.6 billion, a 7% increase, marking a record high for the company [2][3] - The return on tangible equity (ROTE) was 17.2%, achieving the mid-teens target [2] Business Line Performance - Fee and other income from wholesale transaction banking grew 4% year-over-year within the Corporate Investment Banking (CIB) business, while wealth fee and other income rose 22% in the International Wealth and Personal Banking (IWPB) segment [3] Market Performance - Deposits grew by 5%, equivalent to a $78 billion increase, with notable strength in Hong Kong [5][6] - The loan book grew by 2%, with increases in the UK, CIB, and IWPB, partially offset by customer repayments and muted demand in Hong Kong [6] Company Strategy and Industry Competition - The company completed the privatization of Hang Seng Bank ahead of schedule, enhancing its position in Hong Kong, a key financial center [4] - The company announced 11 business exits in 2025 to simplify operations and improve capital efficiency [5] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the ongoing improvement of asset quality and the potential for revenue and cost synergies from the Hang Seng transaction [4][5] - The company expects revenue growth to rise towards 5% by 2028 and targets a return on tangible equity of 17% or better each year [11] Other Important Information - The Common Equity Tier 1 (CET1) ratio was 14.9%, with expectations to manage it within the operating range of 14% to 14.5% [7][8] - The company plans to issue approximately $20 billion of holdco senior debt, $1 billion of Tier 2, and $4 billion of AT1 in 2026 [13] Q&A Session Summary Question: Update on currency issuance plans - The company plans to issue most of its debt in US dollars, with some issuance in other currencies depending on market conditions [17][18] Question: Insights on the FPC review and its implications - Management highlighted the importance of the FPC review and its potential to improve the capital framework, particularly regarding leverage ratios and buffer usability [20][22][25] Question: Timeline for tokenized deposits offering - The company has onboarded clients in Hong Kong for tokenized deposits and aims to expand this offering to other jurisdictions, including the UK and Singapore [27][28] Question: CET1 recovery timeline post-Hang Seng privatization - The CET1 ratio is expected to recover back into the target operating range quickly, with the company remaining capital generative [42][43] Question: Details on MREL requirement increase - The increase in MREL requirements was driven by leverage constraints in certain entities, with a significant buffer still maintained [52][53]