2026-02-25 14:02Financial 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 by 4% year-over-year within the Corporate Investment Banking (CIB) business, while wealth fee and other income in the International Wealth and Personal Banking (IWPB) segment rose by 22% [3] - 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] Market Performance - Deposits grew by 5%, equivalent to an increase of $78 billion, with particularly strong growth in Hong Kong [5][6] - The cost of risk for the year was around 39 basis points, aligned with guidance, with expectations for a similar level in 2026 [6] Strategic Direction 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 strength of the balance sheet and capital generation, with a target for revenue growth of around 5% by 2028 [11] - The company is investing in digital asset capabilities and artificial intelligence to drive future growth and operational efficiency [11][12] Other Important Information - The Common Equity Tier 1 (CET1) ratio was 14.9%, expected to remain 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 [14] Q&A Session Summary Question: Update on issuance plans regarding currency - The company plans to issue a significant portion of its debt in US dollars, with flexibility to consider other currencies based on market conditions [17][18] Question: Insights on the FPC review and its implications - Management welcomed the FPC review, highlighting potential positive changes in leverage ratios and buffer usability [22][23][25] Question: Timeline for tokenized deposits offering - The company has onboarded clients in Hong Kong and is expanding to other jurisdictions, with ongoing development in this area [26][27] Question: Concerns regarding Stage 3 loans and their future trajectory - Stage 3 loans have increased slightly, but management remains optimistic about the overall market conditions and expects to manage risks effectively [75]