HSBC (HSBA) Q1 2025 earnings summary

Executive summary

• Profit before tax rose 11% year-over-year to $9.5bn ($9.8bn excluding notable items), with annualized ROTE at 18.4% excluding notable items, despite a reported decline due to non-recurrence of prior year disposal gains.

• Announced up to $3bn share buyback and $0.10 per share interim dividend, with buyback to commence after AGM.

• Fifth consecutive quarter of double-digit growth in Wealth, with $22bn net new invested assets and over 300,000 new-to-bank customers in Hong Kong.

• Maintained disciplined execution on cost savings and organizational simplification, reallocating costs to high-priority growth areas.

• Confidence in delivering targets remains, supported by a strong balance sheet and diversified income streams, despite a less favorable macro environment.

Financial highlights

• Revenue excluding notable items reached $17.7bn, up $1.1bn or 7% year-over-year, driven by fee and other income; total revenue fell 13–15% due to prior year gains on disposals.

• Banking NII run rate remained stable quarter-on-quarter, with expectation of around $42bn in 2025; NII was $8.3bn, down $0.4bn year-over-year.

• Wholesale Transaction Banking up 13% year-over-year; global payment solutions up 3%, global trade solutions up 6%.

• ECL charge was $0.9bn (28–37bps of loans), including $150m provision for economic uncertainty.

• CET1 ratio at 14.7%; deposits up 6% year-over-year; loans and deposits broadly stable quarter-on-quarter.

Outlook and guidance

• Reaffirmed mid-teens ROTE guidance (excluding notable items) for 2025–2027.

• Banking NII expected to be around $42bn in 2025, subject to market rates; ECL charge expected at 30–40bps.

• On track to deliver cost growth of around 3% in 2025 versus 2024, with $1.8bn restructuring costs expected over 2025–2026.

• Dividend payout targeted at 50% of EPS excluding material notable items.

• CET1 ratio to be managed within 14–14.5% range.