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.

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

• Strong performance in transaction banking, FX, equities, and debt trading, driven by higher client activity and volatility.

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

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 2025 NII expected around $42bn.

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

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

• EPS excluding notable items was $0.39, up from $0.34 year-over-year; reported EPS was $0.39, down from $0.54.

Outlook and guidance

• Reaffirmed mid-teens ROTE guidance for 2025–2027, with cost growth target of around 3% for 2025 and $0.3bn simplification savings expected.

• Banking NII guidance for 2025 remains at ~$42bn, based on mid-April rate curves; ECL charge expected at 30–40bps.

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

• Lending demand expected to remain muted in 2025; medium-term guidance for mid-single digit lending growth and double-digit Wealth fee income growth.

• CET1 ratio to be managed within 14–14.5% range; buybacks remain preferred method for capital return.