REG - HSBC Holdings PLC - Earnings Release 1Q26
Tue 07:00
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RNS Number : 9920C HSBC Holdings PLC 05 May 2026
HSBC Holdings plc Earnings Release 1Q26
5 May 2026
Georges Elhedery, Group CEO, said:
"We continued to make positive progress in creating a simple, more agile,
growing HSBC. Each of our four businesses contributed to firm-wide revenue
growth and each delivered an annualised RoTE in excess of 17%, excluding
notable items. In periods of greater uncertainty, customers turn to us more as
their trusted partner to navigate complexity with the financial strength,
stability and expertise they know they can rely on. We remain confident in
achieving the targets we set out in February 2026."
Financial performance in 1Q26
- Reported profit before tax of $9.4bn decreased by $0.1bn
compared with 1Q25. The decrease reflected higher expected credit losses and
other credit impairment charges ('ECL') in 1Q26, an adverse impact from
notable items and a rise in operating expenses. This was partly offset by
revenue growth from strong Wealth fee and other income, as well as higher
banking net interest income ('banking NII'). Profit after tax of $7.4bn was
$0.2bn lower than in 1Q25.
- In 1Q26, notable items included a disposal loss on
classification to held for sale of $0.3bn associated with the planned sale of
our business in Malta, and losses of $0.2bn from the recycling of foreign
currency translation reserves following the completion of the sale of our UK
life insurance business. In 1Q25, notable items included $0.1bn of fair value
losses on American Depositary Receipts ('ADRs') received as part of the sale
consideration for our business in Argentina.
- Constant currency profit before tax excluding notable items
was $10.1bn, broadly stable compared with 1Q25. Revenue growth, driven by a
strong performance in Wealth and higher banking NII, was broadly offset by
higher ECL and operating expense growth.
- Annualised return on average tangible equity ('RoTE') in
1Q26 was 17.3%, compared with 17.9% in 1Q25. Excluding notable items,
annualised RoTE in 1Q26 was 18.7%, a rise of 0.3 percentage points compared
with 1Q25.
- Revenue increased by $1.0bn or 6% to $18.6bn compared with
1Q25. The increase primarily reflected strong growth in Wealth fees and other
income in our International Wealth and Premier Banking ('IWPB') and Hong Kong
business segments, supported by higher customer activity. The increase also
included a one-off property asset disposal gain of $0.2bn, and growth in
banking NII. This was partly offset by the year-on-year impact of notable
items, mainly related to business disposals. Constant currency revenue
excluding notable items rose by $0.7bn to $19.1bn.
- Net interest income ('NII') of $8.9bn increased by $0.6bn or
8% compared with 1Q25, including an adverse $0.1bn one-off item in 1Q26. The
increase was mainly driven by deposit balance growth, the benefit of
reinvestment of our structural hedge at higher yields and the impact of lower
market interest rates on the funding deployed to the trading book, partly
offset by higher trading balances. Banking NII, which excludes the funding
costs associated with the trading book, which were stable, increased by $0.7bn
to $11.3bn.
- Net interest margin ('NIM') of 1.60% was 1 basis points
('bps') higher compared with 1Q25. NIM was 4bps lower compared with 4Q25,
primarily reflecting the impact of a one-off item in 1Q26.
- ECL of $1.3bn were $0.4bn higher compared with 1Q25. The
charge in 1Q26 primarily reflected a $0.4bn fraud-related, secondary,
securitisation exposure with a financial sponsor in the UK in our Corporate
and Institutional Banking ('CIB') business, as well as a $0.3bn increase in
allowances to reflect heightened uncertainty and a deterioration in the
forward economic outlook due to the onset of the conflict in the Middle East
on 28 February 2026. ECL in 1Q25 included charges related to geopolitical
tensions and higher trade tariffs.
- Operating expenses of $8.7bn were $0.6bn or 8% higher
compared with 1Q25. The increase reflected the phasing of the
performance-related pay accrual relative to 1Q25, the impacts of inflation,
higher planned spend and investment in technology, and an adverse impact from
foreign currency translation differences of $0.4bn. These increases were
partly mitigated by cost reductions from our organisational simplification.
Target basis operating expenses rose by $0.3bn or 3%, including a higher
performance-related pay accrual.
- Customer lending balances increased by $13.6bn compared with
4Q25, including adverse foreign currency translation differences. On a
constant currency basis, lending balances increased by $20.1bn, with growth
across all of our business segments.
- Customer accounts decreased by $5.1bn compared with 4Q25,
including adverse foreign currency translation differences. On a constant
currency basis, customer accounts increased by $9.2bn, primarily driven by
balance growth in CIB in Asia, notably in Hong Kong. Deposit growth was partly
offset by the classification of deposits from the planned sale of our business
in Malta to 'liabilities of disposal groups held for sale'.
- Common equity tier 1 ('CET1') capital ratio of 14.0%
decreased by 0.9 percentage points compared with 4Q25, reflecting the impact
of the privatisation of Hang Seng Bank, dividends and an increase in
risk-weighted assets ('RWAs'), partly offset by regulatory profit.
- The Board has approved a first interim dividend for 2026 of
$0.10 per share.
Outlook
- We retain all of the Group financial targets we announced at
our full year 2025 annual results in February 2026, including a RoTE of 17% or
better for 2026, 2027 and 2028, excluding notable items.
- The macroeconomic outlook is facing heightened uncertainty,
creating volatility in both economic forecasts and financial markets resulting
in both tailwinds and headwinds. The Group is well-positioned to manage the
impacts of these challenges through our high-quality revenue streams,
conservative approach to credit risk and strong deposit franchise. Supporting
our clients through this volatile period is a top priority.
- We now expect banking NII of around $46bn in 2026,
reflecting an improved interest rate outlook, while recognising the outlook
remains volatile and uncertain. We had previously provided banking NII
guidance of at least $45bn for 2026.
- We now expect an ECL charge as a percentage of average gross
loans to be around 45bps (including held for sale loan balances) for 2026,
reflecting ongoing uncertainty in the outlook. Our previous ECL guidance for
2026 was around 40bps of average gross loans (including held for sale loan
balances). Over the medium term, we retain our planning range of 30-40bps.
- We retain our commitment to Group-wide cost discipline. We
continue to target growth in target basis operating expenses of approximately
1% compared with 2025. Our target basis operating expenses measure excludes
notable items and includes the impact of simplification-related saves
associated with our announced strategic reorganisation.
- We intend to continue to manage the CET1 capital ratio
within our medium-term target range of 14%-14.5%. A decision to recommence
buy-backs will be subject to our normal buy-back considerations and process on
a quarterly basis.
- The Group is well positioned to manage the changes and
uncertainties prevalent within the global environment in which we operate,
including in relation to the conflict in the Middle East. As part of our
periodic internal stress testing, we have modelled a range of integrated
downside stress scenarios of increasing severity and duration, which include
higher oil prices, rising inflation, a material slowdown in GDP, rising
unemployment and market disruption. Under these scenarios, we could expect a
mid-to-high single digit percentage adverse impact on profit before tax, which
if unmitigated, could bring RoTE excluding notable items below our 17% or
better target in 2026.
Ø Our targets and expectations reflect our current outlook for the global
macroeconomic environment and market-dependent factors, such as market-implied
interest rates (as of mid-April 2026) and rates of foreign exchange, as well
as customer behaviour and activity levels.
Ø We do not reconcile our forward guidance on RoTE excluding notable items,
constant currency revenue excluding notable items, target basis operating
expenses, dividend payout ratio target basis or banking NII to their
equivalent reported measures.
Ø See page 6 for a further explanation of RoTE excluding notable items,
constant currency revenue excluding notable items, banking NII, target basis
operating expenses and dividend payout ratio target basis. For further
information on our CET1 ratio, see page 46.
Presentation to investors and analysts
HSBC Holdings plc will be conducting a trading update conference call with
analysts and investors today to coincide with the publication of this Earnings
Release 1Q26. The call will take place at 07.45am BST. Details of how to
participate in the call and the live audio webcast can be found at
www.hsbc.com/investors.
About HSBC
HSBC Holdings plc, the parent company of HSBC, is headquartered in London.
With assets of $3.3tn at 31 March 2026, HSBC is one of the world's largest
banking and financial services organisations.
The Group's operating segments comprise of four businesses along with
Corporate Centre:
- Hong Kong
- UK
- Corporate and Institutional Banking
- International Wealth and Premier Banking
Our Hong Kong business comprises Retail Banking and Wealth and Commercial
Banking of HSBC Hong Kong and Hang Seng Bank. Our UK business comprises UK
Retail Banking and Wealth (including first direct and M&S Bank) and UK
Commercial Banking, including HSBC Innovation Bank. CIB integrates our
Commercial Banking business (outside of the UK and Hong Kong) with our Global
Banking and Markets business. IWPB comprises Premier banking outside of Hong
Kong and the UK, our Private Bank, Asset Management and Insurance businesses.
Corporate Centre results primarily comprise the financial impact from certain
acquisitions and disposals and the share of profit, dilution and impairment
loss impacts from interests in our associates and joint ventures. It also
includes Central Treasury, stewardship costs and consolidation adjustments.
Notes
Income statement comparisons, unless stated otherwise, are between the quarter
ended 31 March 2026 and the quarter ended 31 March 2025. Balance sheet
comparisons, unless otherwise stated, are between balances at 31 March 2026
and the corresponding balances at 31 December 2025. Unless otherwise stated,
the factors impacting constant currency income statement performance between
periods are the same factors discussed in relation to reported income
statement performance for the same periods.
The financial information on which this Earnings Release 1Q26 is based is
unaudited. Other than the adoption of certain amendments to IFRS 9 'Financial
Instruments' effective from 1 January 2026, which have had no material impact
on the Group, it has been prepared in accordance with our material accounting
policies as described on pages 274 to 285 of the Annual Report and Accounts
2025.
Reshaping the Group for growth
On 26 January 2026, we completed our privatisation of Hang Seng Bank,
following shareholder and Court approval. Hang Seng Bank is now a wholly-owned
subsidiary of the HSBC Group and Hang Seng Bank shares have been withdrawn
from the Hong Kong Stock Exchange. Through the privatisation of Hang Seng
Bank, we expect to realise $0.5bn in pre-tax revenue and cost synergies across
both our brands in Hong Kong by the end of 2028. We expect to incur associated
restructuring costs of $0.6bn, of which one-off income statement impacts would
be reported as material notable items. We also have an ambition to generate
further revenue and cost opportunities of around $0.4bn by the end of 2028
across both our brands in Hong Kong.
At our 2024 full-year results we announced measures to simplify the Group, and
we have committed to deliver an annualised reduction of around $1.5bn in our
cost base, expected by the end of 2026 from our organisational simplification
programme.
We remain on track to have taken actions to deliver our $1.5bn annualised cost
reduction by the end of June 2026, which is six months earlier than planned.
To date, we have identified and actioned annualised cost savings of
approximately $1.4bn, which resulted in a reduction of around $0.6bn in
operating expenses in the income statement in 2025, and a $0.3bn reduction in
1Q26. In 1Q26 we incurred $0.1bn in restructuring and other related costs,
primarily related to severance, taking the total charge to date to $1.2bn.
We are also focused on opportunities where we have a clear competitive
advantage and accretive returns, and we aim to redeploy approximately $1.8bn
of additional costs saved from non-strategic activities into these areas over
the medium term. This includes the additional $0.3bn of costs saved from the
synergies generated from our privatisation of Hang Seng Bank.
During the first quarter of 2026, we completed the sales of our UK life
insurance business and our business in South Africa. In addition, we
reclassified to held for sale the assets and liabilities related to the
planned sale of our business in Malta. On 30 April 2026, we completed the sale
of our retail banking business in Sri Lanka.
On 4 May 2026, we entered into a binding agreement to sell our retail banking
business in Indonesia. The proposed transaction remains subject to regulatory
approval and is expected to complete in the first half of 2027. Targeted
strategic reviews of our retail businesses in Australia and Egypt, and HSBC
Life Singapore, remain underway on which no decisions have been made. Our CIB
businesses in these markets, as well as in Indonesia are unaffected.
Ø For further details on business disposals, see page 14.
From 1 January 2026, we have updated our definition of Wealth balances to
exclude Asset Management third-party distribution assets. On this new basis,
Wealth balances as at 31 March 2026 across all of our business segments were
$1.6tn, broadly stable compared with 31 December 2025. Within this we have
attracted net new money ('NNM') in 1Q26 of $39bn, with $34bn booked in Asia.
This compared with NNM in 1Q25 of $23bn, with $19bn booked in Asia.
Transaction banking continues to perform well as we leverage our network and
capabilities to capture opportunities from changing trade and capital flows.
In 1Q26, fee and other income in Wholesale Transaction Banking rose by 2%
compared with 1Q25, reflecting increases in Securities Services, Global Trade
Solutions ('GTS') and Global Payment Solutions ('GPS').
Financial summary
Key financial metrics
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
Reported results
Profit before tax ($m) 9,376 6,802 9,484
Profit after tax ($m) 7,394 5,187 7,570
Net operating income before change in expected credit losses and other credit 18,624 16,364 17,649
impairment charges ('revenue') ($m)
Cost efficiency ratio (%) 46.8 57.0 45.9
Net interest margin (%) 1.60 1.64 1.59
Basic earnings per share ($) 0.41 0.28 0.39
Diluted earnings per share ($) 0.40 0.27 0.39
Dividend per ordinary share (in respect of the period) ($) 0.10 0.45 0.10
Alternative performance measures
Constant currency profit before tax ($m) 9,376 6,846 9,788
Constant currency revenue ($m) 18,624 16,464 18,319
Constant currency banking net interest income ($m) 11,253 11,806 11,007
Constant currency cost efficiency ratio (%) 46.8 57.0 46.1
Constant currency profit before tax excluding notable items ($m) 10,055 8,630 10,078
Constant currency revenue excluding notable items ($m) 19,125 17,831 18,411
Constant currency profit before tax excluding notable items and strategic 10,055 N/A 9,984
transactions ($m)
Constant currency revenue excluding notable items and strategic transactions 19,125 N/A 18,233
($m)
Expected credit losses and other credit impairment charges (annualised) as a % 0.52 0.36 0.38
of average gross loans and advances to customers, including held for sale (%)
Basic earnings per share excluding material notable items and related impacts 0.44 0.37 0.39
($)
Return on average ordinary shareholders' equity (annualised) (%) 16.0 10.8 16.6
Return on average tangible equity (annualised) (%) 17.3 11.8 17.9
Return on average tangible equity excluding notable items (annualised) (%) 18.7 15.9 18.4
Target basis operating expenses ($m) 8,543 8,974 8,264
At
31 Mar 2026 31 Dec 2025 31 Mar 2025
Balance sheet
Total assets ($m) 3,306,011 3,233,034 3,054,361
Net loans and advances to customers ($m) 1,001,957 988,399 944,708
Constant currency net loans and advances to customers ($m) 1,001,957 981,879 965,802
Customer accounts ($m) 1,781,761 1,786,828 1,666,485
Constant currency customer accounts ($m) 1,781,761 1,772,579 1,696,120
Average interest-earning assets, year to date ($m) 2,261,415 2,190,078 2,124,161
Loans and advances to customers as % of customer accounts (%) 56.2 55.3 56.7
Total shareholders' equity ($m) 196,819 198,225 190,810
Tangible ordinary shareholders' equity ($m) 162,335 165,153 160,398
Net asset value per ordinary share at period end ($) 10.17 10.36 9.74
Tangible net asset value per ordinary share at period end ($) 9.46 9.64 9.08
Capital, leverage and liquidity
Common equity tier 1 capital ratio (%)(1,2) 14.0 14.9 14.7
Risk-weighted assets ($m)(1,2) 883,759 888,647 853,257
Total capital ratio (%)(1,2) 19.7 20.5 19.9
Leverage ratio (%)(1,2) 5.0 5.3 5.4
High-quality liquid assets (liquidity value) ($m)(2,3) 710,604 702,123 660,704
Liquidity coverage ratio (%)(2,3) 135 137 139
Share count
Period end basic number of $0.50 ordinary shares outstanding, after deducting 17,164 17,140 17,668
own shares held (millions)
Period end basic number of $0.50 ordinary shares outstanding and dilutive 17,293 17,276 17,836
potential ordinary shares, after deducting own shares held (millions)
Average basic number of $0.50 ordinary shares outstanding, after deducting own 17,129 17,136 17,769
shares held (millions)
Ø For reconciliations of our reported results to a constant currency basis,
including lists of notable items, see page 22. Definitions and calculations of
other alternative performance measures are included in 'Alternative
performance measures' on page 30.
1 Regulatory capital ratios and requirements are based on the Prudential rules
in force at the time.
2 Regulatory numbers and ratios are as presented at the date of reporting.
Small changes may exist between these numbers and ratios and those
subsequently submitted in regulatory filings. Where differences are
significant, we may restate in subsequent periods.
3 The liquidity coverage ratio ('LCR') is based on the average value of the
preceding 12 months.
Basis of presentation
Constant currency performance
Constant currency performance is computed by adjusting reported results for
the effects of foreign currency translation differences, which reflect the
movements of the US dollar against most major currencies during 2026.
Excluding these differences allows us to assess balance sheet and income
statement performance on a like-for-like basis and to better understand the
underlying trends in the business. Foreign currency translation differences at
31 March 2026 are computed by retranslating into US dollars for non-US dollar
branches, subsidiaries, joint ventures and associates:
- the income statements for 4Q25 and 1Q25 at the average rate
of exchange for 1Q26;
- the closing prior period balance sheets at the prevailing
rates of exchange on 31 March 2026.
No adjustment has been made to the exchange rates used to translate foreign
currency-denominated assets and liabilities into the functional currencies of
any HSBC branches, subsidiaries, joint ventures or associates. The constant
currency data of our operations in Türkiye has not been adjusted further for
the impacts of hyperinflation. When reference is made to foreign currency
translation differences in tables or commentaries, comparative data reported
in the functional currencies of HSBC's operations has been translated at the
appropriate exchange rates applied in the current period on the basis
described above.
Notable items and material notable items
We separately disclose 'notable items', which are components of our income
statement that management would consider as outside the normal course of
business and generally non-recurring in nature.
Certain notable items are classified as 'material notable items', which are a
subset of notable items. Categorisation as a material notable item is
dependent on the nature of each item in conjunction with the financial impact
on the Group's income statement, and such items are excluded from our
'dividend payout ratio target basis' calculation and 'basic earnings per share
excluding material notable items and related impacts' measure. Material
notable items in 1Q26 or relevant comparative periods relate to the operating
expenses associated with actions to exit or wind down non-strategic
businesses.
Ø The tables on pages 22 to 24 and pages 27 to 29 detail the effects of
notable items on each of our business segments and legal entities.
Impact of strategic transactions
In addition to the items categorised as material notable items, the impacts of
strategic transactions include the distorting impact observed between the
periods of the operating income statement results related to acquisitions and
disposals that affect period-on-period comparisons. Once a transaction has
completed or a wind-down has commenced, the impact will include the operating
income statement results of each business, which are not classified as notable
items, in any comparative period if there are no results in the current period
as a result of a transaction, or a reduction in revenue or costs has arisen
from the wind-down of a business. We consider the monthly impact of distorting
income statement results when calculating the impact of strategic
transactions. In the case of wind-downs, or transactions that complete in
phased tranches, there may be timing differences between the recognition of
operating cost impacts and operating revenue impacts. These would arise in the
event that there is a timing lag between the impact of cost actions and the
resultant impact on operating revenue.
Ø See page 25 for further details on the impact of strategic transactions.
Management view of revenue on a constant currency basis
We provide breakdowns of revenue for each of our business segments on a
constant currency basis by major product. These reflect the basis on which
revenue performance of the businesses is assessed and managed. In the
management view of revenue, notable items are presented separately.
We group certain products in a consistent manner across our business segments.
Wholesale Transaction Banking comprises our Global Foreign Exchange, GPS, GTS
and Securities Services businesses. Wealth comprises our Investment
Distribution, Insurance, Private Bank and Asset Management businesses.
On page 7 we also provide a summarised management view of revenue for the
Group's results, on reported foreign exchange rates, to supplement the Group's
reported revenue performance using the product grouping which is used to
manage and assess our segmental performance.
Impact of hyperinflationary accounting
We continue to treat Türkiye as a hyperinflationary economy for accounting
purposes. The impact of applying International Accounting Standard ('IAS') 29
'Financial Reporting in Hyperinflationary Economies' and the hyperinflation
provisions of IAS 21 'The Effects of Changes in Foreign Exchange Rates' in the
current period on our operations in Türkiye was a decrease in the Group's
profit before tax of $62m (4Q25: $31m decrease; 1Q25: $48m decrease). The
consumer price index at 31 March 2026 for Türkiye was 121.47, an increase in
the 1Q26 period of 11.08 compared with 4Q25 (4Q25: 4.61 increase compared with
3Q25; 1Q25: 8.49 increase compared with 4Q24).
Use of alternative performance measures
Our reported results are prepared in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board
('IFRS Accounting Standards'), as detailed in our financial statements
starting on page 262 of the Annual Report and Accounts 2025.
To measure our performance, we supplement our IFRS Accounting Standards
figures with non-IFRS Accounting Standards measures, which constitute
alternative performance measures under European Securities and Markets
Authority guidance and non-GAAP financial measures defined in and presented in
accordance with the US Securities and Exchange Commission rules and
regulations. These measures include those derived from our reported results
that eliminate factors distorting period-on-period comparisons. The 'constant
currency performance' measure used throughout this report is described on page
5. Definitions and calculations of other alternative performance measures are
included in 'Alternative performance measures' on page 30. All alternative
performance measures are reconciled to the closest reported performance
measure.
Return on average tangible equity excluding notable items
The calculation for RoTE excluding notable items adjusts the 'profit
attributable to the ordinary shareholders, excluding goodwill and other
intangible assets impairment' for the post-tax impact of notable items. To
better align with market practice, from our 2025 full-year results, we no
longer adjust the 'average tangible equity' for the post-tax impact of notable
items in each period. Comparatives have been re-presented.
Ø See page 31 for the definition of return on average tangible equity
excluding notable items and page 31 for the reconciliation to the GAAP
measure.
Banking net interest income
Banking net interest income ('banking NII') adjusts our NII primarily for the
impact of funding trading and fair value activities reported in interest
expense. It represents the Group's banking revenue that is directly impacted
by changes in interest rates. We use this measure to determine the deployment
of our surplus funding, and to help optimise our structural hedging and risk
management actions.
Ø For more information on banking NII, including the reconciliation to the
GAAP measure, see page 11.
Constant currency revenue and profit before tax excluding notable items and
the impact of strategic transactions
To aid the understanding of our results, we separately report 'constant
currency revenue excluding notable items' and 'constant currency profit before
tax excluding notable items', which exclude the impact of notable items and
the impact of foreign exchange translation. We also separately disclose
'constant currency revenue excluding notable items and the impact of strategic
transactions' and 'constant currency profit before tax excluding notable items
and the impact of strategic transactions', which also exclude the impact of
strategic transactions classified as material notable items. We consider these
measures to provide useful information to investors as they remove items that
distort period-on-period comparisons.
The impact of strategic transactions also includes the distorting impact
between the periods of the operating income statement results related to
acquisitions and disposals and that affect period-on-period comparisons. These
impacts are not included in our notable or material notable items. The impact
of strategic transactions is computed by including the operating income
statement results of each business in any period for which there are no
results in the comparative period.
Ø See page 31 for the reconciliation to the GAAP measure.
Target basis operating expenses
Target basis operating expenses includes the impact of simplification-related
saves associated with our announced strategic reorganisation, is measured on a
constant currency basis and excludes notable items and the impact of
retranslating the prior year results of hyperinflationary economies at
constant currency, which we consider to be outside of our control. We consider
target basis operating expenses to provide useful information to investors by
quantifying and excluding the notable items that management considered when
setting and assessing cost-related targets.
Ø See page 33 for the reconciliation to the GAAP measure.
Basic earnings per share excluding material notable items and related impacts
We have established a dividend payout ratio target basis of 50% for 2026. For
the purposes of computing our dividend payout ratio target basis, we exclude
from earnings per share material notable items and related impacts.
Related impacts include those items that do not qualify for designation as
notable items but whose adjustment is considered by management to be
appropriate for the purposes of determining the basis for our dividend payout
ratio target basis calculation, which we exclude from earnings per share
material notable items and related impacts.
Ø See page 25 for the supplementary analysis of the impact of strategic
transactions.
Ø See page 30 for the definition of 'basic earnings per share excluding
material notable items and related impacts' and page 33 for the reconciliation
to the GAAP measure.
Income statement results
Summary consolidated income statement
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Net interest income 8,945 9,196 8,302
Net fee income 3,719 3,194 3,324
Net income from financial instruments held for trading or managed on a fair 5,450 4,621 5,356
value basis
Net income/(expense) from assets and liabilities of insurance businesses, (364 ) 1,619 1,521
including related derivatives, measured at fair value through profit or loss
Insurance finance income/(expense) 401 (1,656 ) (1,556 )
Insurance service result 491 439 347
(Losses)/gains recognised on sale of business operations(1) (505 ) 134 2
Other operating (expense)/income(2) 487 (1,183 ) 353
Net operating income before change in expected credit losses and other credit 18,624 16,364 17,649
impairment charges(3)
Change in expected credit losses and other credit impairment charges (1,301 ) (901 ) (876 )
Net operating income 17,323 15,463 16,773
Total operating expenses excluding amortisation and impairment of intangible (7,997 ) (8,612 ) (7,489 )
assets
Amortisation and impairment of intangible assets (724 ) (718 ) (613 )
Operating profit 8,602 6,133 8,671
Share of profit in associates and joint ventures 774 669 813
Profit before tax 9,376 6,802 9,484
Tax expense (1,982 ) (1,615 ) (1,914 )
Profit after tax 7,394 5,187 7,570
Attributable to:
- ordinary shareholders of the parent company 6,938 4,719 6,932
- other equity holders 407 225 392
- non-controlling interests 49 243 246
Profit after tax 7,394 5,187 7,570
$ $ $
Basic earnings per share 0.41 0.28 0.39
Diluted earnings per share 0.40 0.27 0.39
Dividend per ordinary share (paid in the period) - 0.10 -
% % %
Return on average ordinary shareholders' equity (annualised) 16.0 10.8 16.6
Return on average tangible equity (annualised) 17.3 11.8 17.9
Cost efficiency ratio 46.8 57.0 45.9
1 Amounts in 1Q26 include $0.2bn on the recycling in foreign currency
translation reserve losses arising on completion of the sale of our UK life
insurance business, HSBC Life (UK) Limited, and $0.3bn of disposal losses
recognised upon the 'held for sale' classification of HSBC Continental
Europe's shareholding in HSBC Bank Malta plc.
2 Amounts in 4Q25 include recycling of cumulative fair value losses of $1.5bn
relating to the French retained portfolio of home and certain other loans
following the completion of its sale to a consortium comprising Rothesay Life
plc and CCF.
3 Also referred to as revenue.
1Q26 compared with 1Q25 - reported results
Movement in reported profit compared with 1Q25
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Mar 2025 of which strategic
transactions(1)
$m $m $m % $m
Revenue 18,624 17,649 975 6 (572 )
- of which: net interest income 8,945 8,302 643 8 5
ECL (1,301 ) (876 ) (425 ) (49 ) -
Operating expenses (8,721 ) (8,102 ) (619 ) (8 ) 82
Share of profit from associates and joint ventures 774 813 (39 ) (5 ) -
Profit before tax 9,376 9,484 (108 ) (1 ) (490 )
Tax expense (1,982 ) (1,914 ) (68 ) (4 )
Profit after tax 7,394 7,570 (176 ) (2 )
Revenue excluding notable items 19,125 17,740 1,385 8 (162 )
Profit before tax excluding notable items 10,055 9,766 289 3
1 For details, see 'Strategic transactions supplementary analysis' on page 25.
Supplementary management view of revenue
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Mar 2025 of which strategic
transactions(1)
$m $m $m % $m
Banking NII(2) 11,253 10,599 654 6 2
Fee and other income 7,872 7,141 731 10 (164 )
- Wealth 2,697 2,290 407 18 (37 )
- Wholesale Transaction Banking 3,081 2,912 169 6 (1 )
- Other 2,094 1,939 155 8 (126 )
Revenue excluding notable items(3) 19,125 17,740 1,385 8 (162 )
Notable items (501 ) (91 ) (410 ) >(100) (410 )
Revenue 18,624 17,649 975 6 (572 )
1 For details, see 'Strategic transactions supplementary analysis' on page 25.
2 For a reconciliation of banking NII to reported NII, see page 11. Banking
NII in our supplementary management view of revenue excludes notable items,
which were nil in 1Q26 (1Q25: nil).
3 For a reconciliation of reported revenue to revenue excluding notable items,
see page 31.
Notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Revenue
Disposals, wind-downs, acquisitions and related costs (501 ) (1,359 ) (91 )
Dilution loss of interest in BoCom associate - - -
Currency translation on revenue notable items (8 ) (1 )
Operating expenses
Disposals, wind-downs, acquisitions and related costs (50 ) (157 ) (50 )
Restructuring and other related costs (128 ) (257 ) (141 )
Legal provisions - (11 ) -
Currency translation on operating expenses notable items 8 (7 )
Impairment of interest in associate - - -
Currency translation on associate notable items - -
1Q26 compared with 1Q25 - constant currency basis
Movement in profit before tax compared with 1Q25 - on a constant currency
basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Mar 2025 of which strategic
transactions(1)
$m $m $m % $m
Revenue 18,624 18,319 305 2 (587 )
ECL (1,301 ) (923 ) (378 ) (41 ) -
Operating expenses (8,721 ) (8,453 ) (268 ) (3 ) 84
Share of profit from associates and joint ventures 774 845 (71 ) (8 ) -
Profit before tax 9,376 9,788 (412 ) (4 ) (503 )
1 For details, see 'Strategic transactions supplementary analysis' on page 25.
1Q26 compared with 1Q25 - performance commentary
Reported profit before tax of $9.4bn was $0.1bn lower than in 1Q25, driven by
higher ECL charges, as well as an adverse impact from notable items and growth
in operating expenses. In 1Q26, notable items primarily comprised a disposal
loss on classification to held for sale of $0.3bn associated with the planned
sale of our business in Malta, and losses of $0.2bn from the recycling of
foreign currency translation reserves following the completion of the sale of
our UK life insurance business. In 1Q25, notable items included $0.1bn of fair
value losses on ADRs received as part of the sale consideration for our
business in Argentina. We disposed of these ADRs during the second quarter of
2025. These reductions were partly offset by revenue growth from strong fee
and other income growth in Wealth in our IWPB and Hong Kong businesses and
higher banking NII.
On a constant currency basis, profit before tax of $9.4bn was 4% lower
compared with 1Q25. Excluding notable items, profit before tax of $10.1bn was
broadly stable compared with 1Q25.
Reported revenue of $18.6bn was $1.0bn or 6% higher than in 1Q25 reflecting
fee and other income and banking NII growth. This was partly offset by a net
adverse movement in notable items of $0.4bn, primarily relating to the planned
sale of our business in Malta and the completion of the sale of our UK life
insurance business in 1Q26.
Revenue excluding notable items increased by $1.4bn or 8%, reflecting fee and
other income growth, primarily in Wealth. There was a strong performance in
investment distribution, in both our IWPB and Hong Kong business segments, and
an increase in Private Bank supported by higher customer activity. In
addition, there was growth in Insurance fee and other income driven by higher
contractual service margin ('CSM') release given continued year-on-year growth
in our CSM balance, notably in Hong Kong, favourable experience variances, and
the non-recurrence of onerous contract losses, notably in mainland China.
Fee and other income increased in Wholesale Transaction Banking and also in
Corporate Centre due to a one-off property asset disposal gain of $0.2bn.
These increases were partly offset by a reduction in fee and other income in
Debt and Equity Markets.
NII increased by $0.6bn compared with 1Q25, including an adverse $0.1bn
one-off item in 1Q26. The increase was mainly driven by deposit balance
growth, the benefit of reinvestment of our structural hedge at higher yields
and the impact of lower market interest rates on the funding deployed to the
trading book, partly offset by higher trading balances. The funding costs
associated with generating trading and fair value income were $2.4bn. Banking
NII, which excludes these costs, increased by $0.7bn to $11.3bn.
On a constant currency basis, revenue increased by $0.3bn or 2%.
Reported ECL of $1.3bn were $0.4bn higher compared with 1Q25. The charge in
1Q26 primarily reflected a $0.4bn fraud-related, secondary, securitisation
exposure with a financial sponsor in the UK in our CIB business, as well as a
$0.3bn increase in allowances to reflect heightened uncertainty and a
deterioration in the forward economic outlook due to the onset of the conflict
in the Middle East on 28 February 2026. ECL in 1Q25 included charges related
to geopolitical tensions and higher trade tariffs.
Ø For further details of the calculation of ECL, including the measurement
uncertainties and significant judgements applied to such calculations, the
impact of the economic scenarios and management judgemental adjustments, see
pages 38 to 43.
Reported operating expenses of $8.7bn were $0.6bn or 8% higher. The increase
reflected the phasing of the performance-related pay accrual relative to 1Q25,
the impact of inflation, higher planned spend and investment in technology,
and an adverse impact from foreign currency translation differences of $0.4bn.
These increases were partly mitigated by cost reductions from our
organisational simplification.
Restructuring and other related costs associated with our organisational
simplification of $0.1bn were broadly stable compared with 1Q25. On a constant
currency basis, operating expenses increased by $0.3bn or 3%. Target basis
operating expenses were $0.3bn or 3% higher than in 1Q25.
Reported share of profit from associates and joint ventures of $0.8bn fell by
$39m or 5%, primarily due to a lower share of profit from Bank of
Communications Co., Limited ('BoCom') following the dilution in the Group's
stake from 19.03% to 16.00% during 2025.
Tax expense in 1Q26 was a charge of $2.0bn, representing an effective tax rate
of 21.1%. The effective tax rate for 1Q26 was increased by 1.0% by the
non-deductible losses recorded on the sale of HSBC Life (UK) Limited and the
planned sale of our business in Malta. Tax expense in 1Q25 was a charge of
$1.9bn, representing an effective tax rate of 20.2%. The effective tax rate
for 1Q25 was increased by 0.7% by charges in respect of prior periods.
Dividend
On 5 May 2026, the Board announced a first interim dividend for 2026 of $0.10
per ordinary share. For further details, see page 49.
1Q26 compared with 4Q25 - reported results
Movement in reported profit compared with 4Q25
Quarter ended
Variance
1Q26 vs. 4Q25
31 Mar 2026 31 Dec 2025
$m $m $m %
Revenue 18,624 16,364 2,260 14
- of which: net interest income 8,945 9,196 (251 ) (3 )
ECL (1,301 ) (901 ) (400 ) (44 )
Operating expenses (8,721 ) (9,330 ) 609 7
Share of profit from associates and joint ventures 774 669 105 16
Profit before tax 9,376 6,802 2,574 38
Tax expense (1,982 ) (1,615 ) (367 ) (23 )
Profit after tax 7,394 5,187 2,207 43
Revenue excluding notable items 19,125 17,723 1,402 8
Profit before tax excluding notable items 10,055 8,586 1,469 17
Supplementary management view of revenue
Quarter ended
Variance
1Q26 vs. 4Q25
31 Mar 2026 31 Dec 2025
$m $m $m %
Banking NII(1) 11,253 11,722 (469 ) (4 )
Fee and other income 7,872 6,001 1,871 31
- Wealth 2,697 2,147 550 26
- Wholesale Transaction Banking 3,081 2,647 434 16
- Other 2,094 1,207 887 73
Revenue excluding notable items(2) 19,125 17,723 1,402 8
Notable items (501 ) (1,359 ) 858 63
Revenue 18,624 16,364 2,260 14
1 For a reconciliation of banking NII to reported NII, see page 11. Banking
NII in our supplementary management view of revenue excludes notable items,
which were nil in 1Q26 (4Q25: nil).
2 For a reconciliation of reported revenue to revenue excluding notable items,
see page 31.
1Q26 compared with 4Q25 - constant currency basis
Movement in profit before tax compared with 4Q25 - on a constant currency
basis
Quarter ended
Variance
1Q26 vs. 4Q25
31 Mar 2026 31 Dec 2025
$m $m $m %
Revenue 18,624 16,464 2,160 13
ECL (1,301 ) (910 ) (391 ) (43 )
Operating expenses (8,721 ) (9,389 ) 668 7
Share of profit from associates and joint ventures 774 681 93 14
Profit before tax 9,376 6,846 2,530 37
1Q26 compared with 4Q25 - performance commentary
Reported profit before tax of $9.4bn was $2.6bn higher than in 4Q25. This
primarily reflected an increase in revenue of $2.3bn, which included a net
favourable impact of notable items of $0.9bn, mainly relating to business
disposals. Higher revenue also included growth in fee and other income from
Wealth in our IWPB and Hong Kong business segments, and Debt and Equity
Markets and Global Foreign Exchange in our CIB segment. Operating expenses
fell by $0.6bn compared with 4Q25, while ECL increased by $0.4bn.
Reported profit after tax of $7.4bn was $2.2bn or 43% higher compared with
4Q25.
On a constant currency basis, profit before tax of $9.4bn was $2.5bn higher
than in 4Q25, while excluding notable items it increased by $1.4bn or 17%.
Reported revenue of $18.6bn was $2.3bn or 14% higher, which included a net
favourable impact of notable items of $0.9bn.
In 1Q26, notable items primarily comprised a disposal loss on classification
to held for sale of $0.3bn associated with the planned sale of our business in
Malta, and losses of $0.2bn from the recycling of foreign currency translation
reserves following the completion of the sale of our UK life insurance
business. In 4Q25, notable items primarily comprised reserve recycling losses
of $1.5bn following the completion of the sale of our French retained
portfolio of home and certain other loans.
Revenue excluding notable items increased by $1.4bn driven by the impact of
higher customer activity across Wealth products in our Hong Kong and IWPB
business segments, and stronger client activity and market volatility in Debt
and Equity Markets in CIB. Fee and other income from Wholesale Transaction
Banking also increased, primarily in Global Foreign Exchange driven by
increased market volatility in 1Q26, as well as from higher fee and other
income in GTS.
NII decreased by $0.3bn compared with 4Q25, including an adverse impact of
foreign currency translation differences of $0.1bn. Excluding these factors,
NII decreased due to a lower day count in 1Q26, an adverse $0.1bn one-off item
in 1Q26, the non-recurrence of $0.1bn in favourable one-off items in 4Q25, and
increased funding deployed to the trading book. This was partly offset by the
benefit of deposit growth. The funding costs associated with generating
trading and fair value income were $2.4bn, a reduction of $0.2bn compared with
4Q25. Banking NII, which excludes these costs, decreased by $0.5bn to $11.3bn.
Reported ECL of $1.3bn were $0.4bn or 44% higher than in 4Q25, primarily
reflecting a $0.4bn fraud-related, secondary, securitisation exposure with a
financial sponsor in the UK in our CIB business. In addition, the 1Q26 charge
included a $0.3bn increase in allowances to reflect heightened uncertainty and
a deterioration in the forward economic outlook due to the onset of the
conflict in the Middle East on 28 February 2026.
Reported operating expenses of $8.7bn were $0.6bn or 7% lower. The reduction
included a net favourable impact from notable items of $0.2bn, including
restructuring and other related costs of $0.1bn related to our organisational
simplification, and a $0.1bn impact from strategic transactions, as well as
$0.2bn from lower banking levies, mainly incurred in the fourth quarter. These
decreases were partly offset by higher planned spend and investment in
technology.
On a constant currency basis, operating expenses decreased by $0.7bn or 7%.
Target basis operating expenses were $0.4bn or 5% lower than in 4Q25.
The number of employees expressed in full-time equivalent staff at 31 March
2026 was 208,844, stable compared with 31 December 2025. The number of
contractors at 31 March 2026 was 3,774, a decrease of 200 from 31 December
2025.
Reported share of profit from associates and joint ventures was $0.1bn or 16%
higher, primarily due to a higher share of profit from BoCom.
Tax expense in 1Q26 was a charge of $2.0bn, representing an effective tax rate
of 21.1% (4Q25: 23.7%). The effective tax rate for 1Q26 was increased by 1.0%
by the non-deductible losses recorded on the sale of HSBC Life (UK) Limited
and the planned sale of our business in Malta. The effective tax rate for 4Q25
was increased by the non-deductible bank levy expense and by non-deductible
net losses arising on business disposals. Excluding these items, the effective
tax rate for 4Q25 was 19.1%.
Net interest income
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Interest income 23,658 24,503 24,413
Interest expense (14,713 ) (15,307 ) (16,111 )
Net interest income 8,945 9,196 8,302
Average interest-earning assets 2,261,415 2,221,054 2,124,161
% % %
Gross interest yield(1) 4.24 4.38 4.66
Less: gross interest payable(1) (2.79 ) (2.93 ) (3.34 )
Net interest spread(2) 1.45 1.45 1.32
Net interest margin(3) 1.60 1.64 1.59
1 Gross interest yield is the average annualised interest rate earned on
average interest-earning assets ('AIEA'), net of amortised premiums and loan
fees. Gross interest payable is the average annualised interest cost as a
percentage of average interest-bearing liabilities.
2 Net interest spread is the difference between the average annualised
interest rate earned on AIEA, net of amortised premiums and loan fees, and the
average annualised interest rate payable on average interest-bearing funds.
3 Net interest margin is net interest income expressed as an annualised
percentage of AIEA.
NII in 1Q26 of $8.9bn was $0.3bn lower compared with 4Q25. This mainly
reflected a lower day count, an adverse $0.1bn one-off item in 1Q26, the
non-recurrence of $0.1bn in favourable one-off items in 4Q25, and increased
funding deployed to the trading book. This was partly offset by the benefit of
deposit growth.
NII increased by $0.6bn or 8% compared with 1Q25, including an adverse $0.1bn
one-off item in 1Q26. The increase was mainly driven by deposit balance
growth, the benefit of the reinvestment of our structural hedge at higher
yields and the impact of lower market interest rates on the funding deployed
to the trading book, partly offset by higher trading balances.
NIM for 1Q26 of 1.60% was 1bps higher compared with 1Q25. NIM was down 4bps in
1Q26 compared with 4Q25, primarily reflecting the one-off items mentioned
above.
Interest income in 1Q26 of $23.7bn decreased by $0.8bn or 3% compared with
1Q25, and by $0.8bn or 3% compared with 4Q25, due to lower market interest
rates. On a constant currency basis, interest income fell by $1.7bn compared
with 1Q25, and by $1.0bn compared with 4Q25.
Interest expense in 1Q26 of $14.7bn decreased by $1.4bn or 9% compared with
1Q25, and by $0.6bn or 4% compared with 4Q25, due to lower market interest
rates. On a constant currency basis, interest expense fell by $2.0bn compared
with 1Q25, and by $0.7bn compared with 4Q25.
Banking net interest income
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Net interest income 8,945 9,196 8,302
Banking book funding costs used to generate 'net income from financial 2,356 2,592 2,403
instruments held for trading or managed on a fair value basis'
Third-party net interest income from insurance (48 ) (66 ) (106 )
Banking net interest income 11,253 11,722 10,599
Currency translation 84 408
Banking net interest income - on a constant currency basis 11,253 11,806 11,007
Banking net interest income - on a reported basis 11,253 11,722 10,599
- of which:
The Hongkong and Shanghai Banking Corporation Limited 5,431 5,710 5,439
HSBC UK Bank plc 3,027 3,046 2,662
HSBC Bank plc 1,376 1,477 1,104
Banking NII adjusts our NII primarily for the impact of funding trading and
fair value activities reported in interest expense. It represents the Group's
banking revenue that is directly impacted by changes in interest rates. It is
defined as Group net interest income after deducting:
- the internal cost to fund trading and fair value net assets
for which associated revenue is reported in 'Net income from financial
instruments held for trading or managed on a fair value basis', also referred
to as 'trading and fair value income'. These funding costs reflect proxy
overnight or term interest rates as applied by internal funds transfer
pricing;
- the funding cost of foreign exchange swaps in Markets
Treasury, where an offsetting income or loss is recorded in trading and fair
value income. These instruments are used to manage foreign currency deployment
and funding in our entities; and
- third-party net interest income in our insurance business.
In our segmental disclosures, the funding costs of trading and fair value net
assets are predominantly recorded in CIB in 'net income from financial
instruments held for trading or managed on a fair value basis'. On
consolidation, this funding is eliminated in Corporate Centre, resulting in an
increase in the funding cost reported in net interest income with an
equivalent offsetting increase in 'net income from financial instruments held
for trading or managed on a fair value basis' in this segment. In the
consolidated Group results, the cost to fund these trading and fair value net
assets is reported in net interest income.
Banking NII was $11.3bn in 1Q26, an increase of $0.7bn or 6% compared with
1Q25, mainly driven by deposit growth, and the benefit of reinvestment of our
structural hedge at higher yields. This was partly offset by an adverse $0.1bn
one-off item in 1Q26. The funding costs associated with generating trading and
fair value income were $2.4bn, broadly stable compared with 1Q25.
The internally allocated funding to generate trading and fair value income was
approximately $243bn at 1Q26, a rise of approximately $43bn since 1Q25, and up
$18bn compared with 4Q25. This relates to trading, fair value and associated
net asset balances predominantly in CIB.
Balance sheet
Summary consolidated balance sheet
At
31 Mar 2026 31 Dec 2025
$m $m
Assets
Cash and balances at central banks 214,707 242,859
Trading assets 365,667 366,153
Financial assets designated and otherwise mandatorily measured at fair value 138,535 133,063
through profit or loss
Derivatives 267,583 237,740
Loans and advances to banks 100,297 108,462
Loans and advances to customers 1,001,957 988,399
Reverse repurchase agreements - non-trading 314,864 298,392
Financial investments 580,632 567,211
Assets held for sale 11,583 11,115
Other assets 310,186 279,640
Total assets 3,306,011 3,233,034
Liabilities
Deposits by banks 87,581 97,952
Customer accounts 1,781,761 1,786,828
Repurchase agreements - non-trading 216,162 204,974
Trading liabilities 80,646 72,122
Financial liabilities designated at fair value 167,693 158,456
Derivatives 259,845 237,854
Debt securities in issue 101,742 99,675
Insurance contract liabilities 128,070 122,955
Liabilities of disposal groups held for sale 20,719 23,382
Other liabilities 264,522 223,170
Total liabilities 3,108,741 3,027,368
Equity
Total shareholders' equity 196,819 198,225
Non-controlling interests 451 7,441
Total equity 197,270 205,666
Total liabilities and equity 3,306,011 3,233,034
Combined view of customer lending and customer deposits
At
31 Mar 2026 31 Dec 2025
$m $m
Loans and advances to customers 1,001,957 988,399
Loans and advances to customers of disposal groups reported in 'Assets held 4,910 2,190
for sale'
- business in Malta 3,191 -
- Germany custody business 316 323
- business in South Africa - 431
- retail banking business in Sri Lanka 98 101
- business in Uruguay 1,304 1,314
- other - 21
Non-current assets held for sale 645 1,303
Combined customer lending 1,007,512 991,892
Currency translation (6,589 )
Combined customer lending at constant currency 1,007,512 985,303
Customer accounts 1,781,761 1,786,828
Customer accounts reported in 'Liabilities of disposal groups held for sale' 19,007 16,173
- business in Malta 7,276 -
- Germany custody business 9,772 12,316
- business in South Africa - 2,056
- retail banking business in Sri Lanka 426 430
- business in Uruguay 1,534 1,369
- other - 2
Combined customer deposits 1,800,768 1,803,001
Currency translation (14,563 )
Combined customer deposits at constant currency 1,800,768 1,788,438
Balance sheet commentary - 31 March 2026 compared with 31 December 2025
At 31 March 2026, our total assets of $3.3tn were $73.0bn higher on a reported
basis and included the adverse effects of foreign currency translation
differences of $25.1bn. On a constant currency basis, total assets were
$98.1bn higher, as increases in derivative assets, settlement balances, loans
and advances to customers, reverse repos and financial investments were partly
offset by a decrease in cash and balances at central banks.
Loans and advances to customers as a percentage of customer accounts were
56.2%, compared with 55.3% at 31 December 2025.
Loans and advances to customers of $1.0tn were $13.6bn higher on a reported
basis. This included an adverse effect of foreign currency translation
differences of $6.5bn. On a constant currency basis, customer lending balances
increased by $20.1bn.
The following movements are on a constant currency basis.
In CIB, customer lending increased by $12.0bn, which included an increase in
GTS lending in the Middle East, Singapore and India. There was also lending
growth in the US and Hong Kong, partly offset by a decrease in Mexico.
In our UK business, customer lending rose by $4.4bn, primarily driven by
continued growth in commercial lending and mortgage balances.
In our Hong Kong business, customer lending increased by $2.4bn, driven by
higher term and other lending balances across commercial and retail customers.
In our IWPB business, customer lending rose by $1.2bn, reflecting growth in
Private Bank lending notably in Hong Kong and Singapore. This was partly
offset by the classification to 'assets of disposal groups held for sale' of
loans from the planned sale of our business in Malta.
Customer accounts of $1.8tn decreased by $5.1bn on a reported basis. This
included the adverse effects of foreign currency translation differences of
$14.2bn. On a constant currency basis, customer accounts increased by $9.2bn.
The following movements are on a constant currency basis.
In CIB, customer accounts increased by $10.5bn. This included growth in
balances in Hong Kong, reflecting new client mandates in Securities Services,
partly offset by the classification to 'liabilities of disposal groups held
for sale' of $2.0bn of deposits from the planned sale of our business in
Malta.
In IWPB, customer accounts decreased by $1.1bn reflecting the classification
to 'liabilities of disposal groups held for sale' of $5.2bn of deposits from
the planned sale of our business in Malta. This was partly offset by growth in
deposits in Private Bank notably in Hong Kong, and retail deposits in the US.
In our Hong Kong and UK businesses, customer accounts remained broadly stable.
Total shareholders' equity, including non-controlling interests, of $197bn
decreased by $8bn or 4% compared with 31 December 2025. Profit generated of
$7bn was more than offset by the impact of the $13.7bn privatisation of Hang
Seng Bank, which comprised the derecognition of $7bn in non-controlling
interests and a residual $6.7bn reduction in shareholders' equity. In
addition, there were losses through other comprehensive income of $3bn.
Financial investments
As part of our interest rate hedging strategy, we hold a portfolio of debt
instruments, reported within financial investments, which are classified as
hold-to-collect-and-sell. As a result, the change in value of these
instruments is recognised through 'debt instruments at fair value through
other comprehensive income' in equity. At 1Q26, we recognised a pre-tax
cumulative unrealised loss reserve through other comprehensive income of
$2.4bn related to these hold-to-collect-and-sell positions, excluding
investments held in our insurance business. This compared with an unrealised
loss of $1.1bn at 4Q25, and reflected a $1.3bn pre-tax loss in 1Q26, inclusive
of movements on related fair value hedges.
We also hold a portfolio of financial investments measured at amortised cost,
which are classified as hold-to-collect and are held to manage our interest
rate exposure. At 1Q26, the debt instruments within this portfolio had a
cumulative unrecognised loss of $1.8bn, representing a $1.4bn deterioration
during 1Q26.
Risk-weighted assets
RWAs of $883.8bn decreased by $4.8bn compared with 31 December 2025, primarily
due to lower market risk RWAs of $6.3bn, mainly due to a reduction of
structural foreign exchange exposures following completion of the
privatisation of Hang Seng Bank and a $5.0bn fall from foreign currency
translation differences. Further decreases reflected the $3.5bn impact from
strategic transactions and credit quality improvements of $3.1bn, mainly in
our Hong Kong business. This was offset mainly by higher corporate lending in
our CIB and UK businesses, and Saudi Awwal Bank ('SAB') within Corporate
Centre.
Ø For further details on RWAs, see page 47.
View of customer deposits by type
The following table, introduced at 1Q26, shows a view of customer deposits by
type. Instant access/demand deposits include current accounts and savings
accounts that can be contractually accessed on demand by the customer with no
or limited conditions on withdrawal. Fixed term deposits include term
deposits, and instant access/demand deposits where withdrawal is contractually
permitted but subject to conditions impacting withdrawal.
Customer deposits - legal entities
At 31 Mar 2026
HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Total
$m $m $m $m $m $m $m $m
Instant access/demand deposits ('IA/D') 287,984 223,165 581,050 29,054 92,393 20,050 7,474 1,241,170
Fixed term deposits 82,619 90,406 338,520 9,128 7,558 8,235 4,125 540,591
Total customer accounts 370,603 313,571 919,570 38,182 99,951 28,285 11,599 1,781,761
IA/D to total customer accounts ratio (%) 78 71 63 76 92 71 64 70
Loans and advances to customers 311,494 103,572 479,119 24,420 55,361 24,068 3,923 1,001,957
Loan to IA/D ratio (%) 108 46 82 84 60 120 52 81
Loan to total customer accounts ratio (%) 84 33 52 64 55 85 34 56
At 31 Dec 2025
Instant access/demand deposits 293,276 216,100 570,222 28,701 91,189 21,138 6,006 1,226,632
Fixed term deposits 83,627 105,351 341,503 8,309 8,269 8,355 4,782 560,196
Total customer accounts 376,903 321,451 911,725 37,010 99,458 29,493 10,788 1,786,828
IA/D to total customer accounts ratio (%) 78 67 63 78 92 72 56 69
Loans and advances to customers 310,116 106,409 467,842 22,618 52,178 25,252 3,984 988,399
Loan to IA/D ratio (%) 106 49 82 79 57 119 66 81
Loan to total customer accounts ratio (%) 82 33 51 61 52 86 37 55
Business disposals
During the first quarter of 2026, we recognised a pre-tax loss on disposal of
$0.3bn related to the planned sale of our business in Malta and a loss of
$0.2bn following completion of the sale of our UK life insurance entity. We
reported balances of $11.6bn in assets held for sale and $20.7bn in
liabilities held for sale at 31 March 2026, which were predominantly business
groups that met held for sale criteria. This included reclassification to held
for sale of $8.3bn in assets and $8.2bn in liabilities in respect of our
business in Malta, which was offset by derecognitions following completion of
the sale of our UK life insurance entity and our business in South Africa.
On 4 May 2026, PT Bank HSBC Indonesia, an indirect subsidiary of HSBC
Holdings, entered into a binding agreement to sell its retail banking business
to PT Bank OCBC NISP Tbk. The transaction, which is subject to regulatory
approval, is expected to complete in the first half of 2027, at which point,
subject to variable consideration terms, an estimated up to $0.4bn pre-tax
gain will be recognised.
On 30 April 2026, The Hongkong and Shanghai Banking Corporation Limited
completed the sale of its retail banking business in Sri Lanka to Nations
Trust Bank PLC. An immaterial pre-tax gain on disposal was recognised
following completion.
On 27 February 2026, HSBC Bank plc completed the transfer of its business in
South Africa to local lender FirstRand Bank Ltd. Prior to their derecognition
at completion, as at 31 December 2025, related balances stood at $0.4bn in
assets and $2.1bn in liabilities. Upon subsequent wind-down of the entity,
expected in the second half of 2026, cumulative foreign currency translation
reserves and other reserves will recycle to the income statement. At 31 March
2026, foreign currency translation reserve and other reserve losses stood at
$0.2bn.
On 30 January 2026, HSBC Bank plc completed the sale of its UK life insurance
entity, HSBC Life (UK) Limited, to Chesnara plc. Prior to their derecognition
at completion, as at 31 December 2025, related balances stood at $6.6bn in
assets and $6.4bn in liabilities. On completion, we recognised a loss of
$0.2bn following the recycling of foreign currency translation reserves to the
income statement.
On 16 September 2025, HSBC Continental Europe entered into a put option
agreement with CrediaBank S.A. for the potential sale of its 70.03% majority
stake in HSBC Bank Malta plc. On 22 December 2025, following completion of the
employee information and consultation process in France and in line with the
put option terms, a sale and purchase agreement was signed. As at 31 March
2026, given that the operational readiness and transition activities were
expected to be substantially completed within 12 months, and with legal
completion anticipated shortly after, we judged the disposal group met the
held for sale criteria. As a result, $8.3bn of assets and $8.2bn of
liabilities were classified as held for sale and a pre-tax loss on disposal of
$0.3bn was recognised. The transaction remains subject to regulatory approval.
On 27 July 2025, HSBC Latin America Holdings (UK) Limited entered into a
binding agreement to sell HSBC Bank (Uruguay) S.A. to a subsidiary of BTG
Pactual Holding SA. The disposal group met the held for sale criteria and an
immaterial loss on disposal was recognised in the third quarter of 2025, with
balances remaining classified as held for sale at 31 March 2026 of $2.2bn in
assets and $2.0bn in liabilities. The transaction, which is subject to
regulatory approvals, is expected to complete in the second half of 2026.
On 11 July 2025, HSBC Continental Europe, a wholly-owned subsidiary of HSBC
Bank plc, reached an agreement to sell its fund administration business,
Internationale Kapitalanlagegesellschaft mbH, to BlackFin Capital Partners
S.A.S. The disposal group met the held for sale criteria in the third quarter
of 2025, with immaterial balances remaining classified as held for sale at 31
March 2026. This transaction, which has received regulatory approval, is
expected to complete in the second half of 2026, at which point an immaterial
gain on disposal will be recognised.
On 27 June 2025, HSBC Continental Europe reached an agreement to sell its
custody business in Germany to BNP Paribas. This transaction will be completed
in a phased manner, with the initial phase completed in the first quarter of
2026. While client consent and related operational requirements may extend the
timing for completion of all client transfers, given the signing of a sale and
purchase agreement, the disposal group met the held for sale criteria in the
second quarter of 2025, with balances remaining classified as held for sale at
31 March 2026 of $0.4bn in assets and $10.1bn in liabilities. The sale is
expected to generate an estimated pre-tax gain on disposal of $0.1bn, which
will be recognised in line with completion of client transfers.
Events after the balance sheet date
On 30 April 2026, The Hongkong and Shanghai Banking Corporation Limited
completed the sale of its retail banking business in Sri Lanka to Nations
Trust Bank PLC. An immaterial pre-tax gain on disposal was recognised
following completion.
On 4 May 2026, PT Bank HSBC Indonesia, an indirect subsidiary of HSBC
Holdings, entered into a binding agreement to sell its retail banking business
to PT Bank OCBC NISP Tbk. The transaction, which is subject to regulatory
approval, is expected to complete in the first half of 2027, at which point,
subject to variable consideration terms, an estimated up to $0.4bn pre-tax
gain will be recognised.
Business segments
Our business segments - Hong Kong, UK, Corporate and Institutional Banking and
International Wealth and Premier Banking - along with Corporate Centre - are
our reportable segments under IFRS 8 'Operating Segments'.
The Group Operating Committee is considered the Chief Operating Decision Maker
('CODM') for the purposes of identifying the Group's reportable segments.
Business segment results are assessed by the CODM on the basis of constant
currency performance. We separately disclose 'notable items', as described on
page 5.
Our operations are closely integrated and, accordingly, the presentation of
data includes internal allocations of certain items of income and expense.
These allocations include the costs of certain support services and global
infrastructures to the extent that they can be meaningfully attributed to
business segments. While such allocations have been made on a systematic and
consistent basis, they necessarily involve a degree of subjectivity. Costs
that are not allocated to business segments are included in Corporate Centre.
Where relevant, income and expense amounts presented include the results of
inter-segment funding along with inter-company and inter-business line
transactions. All such transactions are undertaken on arm's length terms. The
intra-Group elimination items for business segments are presented in Corporate
Centre.
As required by IFRS 8, reconciliations of the constant currency results to the
Group's reported results are presented on page 22. Supplementary
reconciliations of constant currency to reported results by business segment
are presented on pages 23 to 25 for information purposes.
Effective 1 January 2026, we transferred certain clients, primarily in Hong
Kong and the UK, to the CIB segment to better meet their needs. This transfer
does not change the Group's reportable segments. Comparative periods have been
re-presented accordingly. The re-presentation has no impact on the Group's
consolidated financial results or financial position.
Hong Kong - constant currency basis
Results - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Revenue 4,024 3,954 3,915 109 3 -
ECL (208 ) (307 ) (315 ) 107 34 -
Operating expenses (1,227 ) (1,299 ) (1,136 ) (91 ) (8 ) -
Share of profit/(loss) from associates and joint ventures - - - - 0 -
Profit before tax 2,589 2,348 2,464 125 5 -
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
Management view of revenue - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Banking NII(2) 2,905 3,180 2,962 (57 ) (2 ) -
Fee and other income 1,119 774 953 166 17 -
- Retail Banking and Wealth 798 545 658 140 21 -
- Retail Banking 95 65 86 9 10 -
- Wealth 673 457 544 129 24 -
- Other(3) 30 23 28 2 7 -
- Commercial Banking 321 229 295 26 9 -
- Wholesale Transaction Banking 193 171 177 16 9 -
- Credit and Lending 26 16 26 - - -
- Other(3) 102 42 92 10 11 -
Revenue excluding notable items 4,024 3,954 3,915 109 3 -
Notable items - - - - n/a -
Revenue 4,024 3,954 3,915 109 3 -
RoTE (annualised)(4) (%) 44.7 36.8
RoTE excluding notable items (annualised)(4) (%) 44.7 37.0
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
2 For a description of how we derive banking NII, see page 11. In the Hong
Kong business, there are no adjustments to NII to derive banking NII.
3 Includes revenue from Markets Treasury. It also includes other
non-product-specific income and notional tax credits.
4 For details of our RoTE calculation by business segment, see page 32.
Notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Operating expenses
Restructuring and other related costs (4 ) (6 ) (7 )
Currency translation on operating expenses notable items - - -
1Q26 compared with 1Q25
Profit before tax of $2.6bn increased by $0.1bn or 5% compared with 1Q25 on a
constant currency basis.
Revenue of $4.0bn was $0.1bn or 3% higher on a constant currency basis.
Banking NII of $2.9bn decreased by $0.1bn or 2%. The decrease was mainly due
to margin compression on deposits in a lower interest rate environment and an
adverse one-off impact of $0.1bn in 1Q26, which more than offset the impact of
deposit balance growth.
Fee and other income of $1.1bn grew by $0.2bn or 17%, primarily driven by
higher Wealth revenue, underpinned by strong performance in investment
distribution driven by higher customer activity and invested asset balance
growth.
ECL of $0.2bn in 1Q26 were $0.1bn lower than in 1Q25 on a constant currency
basis, reflecting higher recoveries related to the Hong Kong commercial real
estate ('CRE') sector.
Operating expenses of $1.2bn increased by $0.1bn or 8% on a constant currency
basis, driven by continued investment in our Wealth business, the phasing of
the performance-related pay accrual relative to 1Q25 and the impacts of
inflation. These increases were partly mitigated by cost reductions from our
organisational simplification and lower marketing expenses.
UK - constant currency basis
Results - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Revenue 3,250 3,293 3,107 143 5 -
ECL (203 ) (101 ) (181 ) (22 ) (12 ) -
Operating expenses (1,402 ) (1,478 ) (1,348 ) (54 ) (4 ) -
Share of profit/(loss) from associates and joint ventures - - - - 0 -
Profit before tax 1,645 1,714 1,578 67 4 -
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
Management view of revenue - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Banking NII(2) 2,807 2,892 2,668 139 5 -
Fee and other income 443 401 439 4 1 -
- Retail Banking and Wealth 182 132 163 19 12 -
- Retail Banking 72 52 67 5 7 -
- Wealth 88 72 92 (4 ) (4 ) -
- Other(3) 22 8 4 18 >100 -
- Commercial Banking 261 269 276 (15 ) (5 ) -
- Wholesale Transaction Banking 202 206 218 (16 ) (7 ) -
- Credit and Lending 61 65 56 5 9 -
- Other(3) (2 ) (2 ) 2 (4 ) >(100) -
Revenue excluding notable items 3,250 3,293 3,107 143 5 -
Notable items - - - - n/a -
Revenue 3,250 3,293 3,107 143 5 -
RoTE (annualised)(4) (%) 21.5 21.9
RoTE excluding notable items (annualised)(4) (%) 21.6 21.9
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
2 For a description of how we derive banking NII, see page 11. In the UK
business, there are no adjustments to NII to derive banking NII.
3 Includes revenue from Markets Treasury. It also includes other
non-product-specific income and notional tax credits.
4 For details of our RoTE calculation by business segment, see page 32.
Notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Operating expenses
Disposals, wind-downs, acquisitions and related costs - - -
Restructuring and other related costs (8 ) (7 ) (4 )
Currency translation on operating expenses notable items - - (1 )
1Q26 compared with 1Q25
Profit before tax of $1.6bn was $0.1bn or 4% higher than in 1Q25 on a constant
currency basis.
Revenue of $3.3bn was $0.1bn or 5% higher on a constant currency basis.
Banking NII of $2.8bn increased by $0.1bn or 5%, reflecting the continued
benefit of our structural hedge, higher corporate and retail lending balances,
and growth in deposit balances, partly offset by the impact of lower interest
rates.
Fee and other income of $0.4bn was broadly stable on a constant currency
basis.
ECL of $0.2bn increased by $22m on a constant currency basis. This reflected
heightened uncertainty and a deterioration in the forward economic outlook due
to the onset of the conflict in the Middle East on 28 February 2026.
Operating expenses of $1.4bn increased by $0.1bn on a constant currency basis,
with an increase in costs incurred on branch security given the heightened
risk environment, continued investment in technology and the impact of
inflation. These increases were partly mitigated by cost reductions from our
organisational simplification.
Corporate and Institutional Banking - constant currency basis
Results - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Revenue 7,788 7,054 7,651 137 2 (14 )
ECL (679 ) (235 ) (181 ) (498 ) >(100) -
Operating expenses (3,772 ) (4,143 ) (3,674 ) (98 ) (3 ) 73
Share of profit/(loss) from associates and joint ventures - - - - - -
Profit before tax 3,337 2,676 3,796 (459 ) (12 ) 59
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
Management view of revenue - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Banking NII(2) 3,960 3,995 3,721 239 6 (9 )
Fee and other income 3,822 3,061 3,930 (108 ) (3 ) (11 )
- Wholesale Transaction Banking 2,686 2,284 2,624 62 2 (1 )
- Investment Banking 260 210 254 6 2 (10 )
- Debt and Equity Markets 751 381 1,009 (258 ) (26 ) (1 )
- Wholesale Credit and Lending 170 175 147 23 16 -
- Other(3) (45 ) 11 (104 ) 59 57 1
Revenue excluding notable items 7,782 7,056 7,651 131 2 (20 )
Notable items 6 (2 ) - 6 >100 6
Revenue 7,788 7,054 7,651 137 2 (14 )
RoTE (annualised)(4) (%) 17.0 19.3
RoTE excluding notable items (annualised)(4) (%) 17.2 19.7
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
2 For a description of how we derive banking NII, see page 11. In CIB, there
are no adjustments to NII to derive banking NII. The internal funding costs of
trading and fair value net assets are recorded in 'fee and other income'. On
consolidation, this funding is eliminated in Corporate Centre. In 1Q26, this
funding cost was $2.4bn (4Q25: $2.6bn, 1Q25: $2.5bn).
3 Includes revenue from Markets Treasury and principal investments. It also
includes other non-product-specific income and notional tax credits.
4 For details of our RoTE calculation by business segment, see page 32.
Notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Revenue
Disposals, wind-downs, acquisitions and related costs 6 (3 ) -
Currency translation on revenue notable items - 1 -
Operating expenses
Disposals, wind-downs, acquisitions and related costs (12 ) (77 ) (26 )
Restructuring and other related costs (19 ) (73 ) (46 )
Currency translation on operating expenses notable items - (2 ) (7 )
1Q26 compared with 1Q25
Profit before tax of $3.3bn was $0.5bn or 12% lower than in 1Q25 on a constant
currency basis.
Revenue of $7.8bn was $0.1bn or 2% higher on a constant currency basis.
Banking NII of $4.0bn increased by $0.2bn or 6% primarily reflecting increased
funding deployed into trading activities on higher bullion balances, and
strong financing demand across developed and emerging markets.
Fee and other income of $3.8bn was $0.1bn or 3% lower than in 1Q25.
- In Debt and Equity Markets, fee and other income decreased
by $0.3bn or 26% primarily reflecting higher funding costs associated with
trading activities on higher bullion balances, and lower fees compared with a
stronger 1Q25.
- In Wholesale Transaction Banking, fee and other income
increased by $0.1bn, driven by higher volumes and new mandates across
Securities Services, GPS and GTS. There was also a one-off recovery fee in
GTS.
- In Other, fee and other income increased by $0.1bn,
reflecting growth in principal investments.
ECL of $0.7bn in 1Q26 increased by $0.5bn compared with 1Q25 on a constant
currency basis. The charge in 1Q26 primarily reflected a $0.4bn fraud-related,
secondary, securitisation exposure in the UK with a financial sponsor, as well
as an increase in allowances to reflect heightened uncertainty and a
deterioration in the forward economic outlook due to the onset of the conflict
in the Middle East on 28 February 2026.
Operating expenses of $3.8bn were $0.1bn or 3% higher on a constant currency
basis, reflecting the phasing of the performance-related pay accrual relative
to 1Q25 and the impact of inflation. These increases were partly mitigated by
cost reductions from our organisational simplification.
International Wealth and Premier Banking - constant currency basis
Results - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Revenue 3,749 3,732 3,693 56 2 (217 )
ECL (210 ) (243 ) (255 ) 45 18 -
Operating expenses (2,333 ) (2,500 ) (2,221 ) (112 ) (5 ) 20
Share of profit/(loss) from associates and joint ventures 25 (2 ) 11 14 >100 -
Profit before tax 1,231 987 1,228 3 - (197 )
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
Management view of revenue - on a constant currency basis
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025 Variance
1Q26 vs. 1Q25
of which strategic transactions(1)
$m $m $m $m % $m
Banking NII(2) 1,750 1,807 1,822 (72 ) (4 ) (22 )
Fee and other income 2,166 1,830 1,887 279 15 (44 )
- Retail Banking 229 187 168 61 36 (1 )
- Wealth 1,936 1,626 1,715 221 13 (43 )
- Other(3) 1 17 4 (3 ) (75 ) -
Revenue excluding notable items 3,916 3,637 3,709 207 6 (66 )
Notable items (167 ) 95 (16 ) (151 ) >(100) (151 )
Revenue 3,749 3,732 3,693 56 2 (217 )
RoTE (annualised)(4) (%) 22.7 19.2
RoTE excluding notable items (annualised)(4) (%) 27.4 19.9
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
2 For a description of how we derive banking NII, see page 11. Banking NII in
IWPB is computed by deducting third-party NII in our insurance business from
total
IWPB NII, which was $48m in 1Q26 (4Q25: $67m, 1Q25: $113m). Total Insurance
NII is presented in 'fee and other income' in Wealth.
3 Includes allocated revenue from Markets Treasury and hyperinflationary
impacts. It also includes other non-product-specific income.
4 For details of our RoTE calculation by business segment, see page 32.
Notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Revenue
Disposals, wind-downs, acquisitions and related costs (167 ) 94 (14 )
Currency translation on revenue notable items - 1 (2 )
Operating expenses
Disposals, wind-downs, acquisitions and related costs (6 ) (29 ) (4 )
Restructuring and other related costs (21 ) (53 ) (23 )
Currency translation on operating expenses notable items - (2 ) (1 )
1Q26 compared with 1Q25
Profit before tax of $1.2bn remained stable compared with 1Q25 on a constant
currency basis, including an adverse impact of $0.2bn from strategic
transactions.
Revenue of $3.7bn was broadly stable on a constant currency basis compared
with 1Q25, including an adverse impact of $0.2bn from strategic transactions.
Banking NII of $1.8bn decreased by $0.1bn or 4%, primarily due to lower
interest rates on deposits, partly offset by balance sheet growth.
Fee and other income of $2.2bn was up by $0.3bn or 15%, driven by Wealth due
to growth across all products and in multiple markets, including mainland
China, Hong Kong, Singapore and Taiwan.
In Wealth, fee and other income of $1.9bn was up by $0.2bn or 13% including an
adverse impact from strategic transactions.
- Investment distribution rose by $0.1bn or 29%, primarily due
to higher sales of mutual funds and structured products, mainly in Asia.
- Insurance income was $0.1bn or 16% higher than in 1Q25,
including the impact of strategic transactions. The increase was driven by
higher CSM release given continued year-on-year growth in our CSM balance,
notably in Hong Kong, favourable experience variances, and the non-recurrence
of onerous contract losses, notably in mainland China. Additionally, the
insurance manufacturing CSM balance at 1Q26 was $15.2bn, up by $2.4bn or 19%
compared with 1Q25. The increase primarily reflected new business CSM growth
of $0.3bn or 31%, partly offset by CSM release.
- Private Bank increased by $39m or 8%, as increased customer
activity supported by business initiatives led to strong performances in
brokerage and trading, and from higher annuity fees, driven by growth in
invested asset balances. This was partly offset by impacts from strategic
transactions.
In Retail Banking, fee and other income of $0.2bn was up by $0.1bn or 36%,
mainly driven by gains in Mexico from the disposal of minority interests.
Notable items in 1Q26 primarily related to losses of $0.2bn from the recycling
of foreign currency translation reserves following the completion of the sale
of our UK life insurance business.
ECL of $0.2bn in 1Q26 were $45m or 18% lower than in 1Q25 on a constant
currency basis. This reflected a reduction in charges in Mexico, mainly due to
lower unsecured lending, while credit performance across the rest of the
portfolio remained stable.
Operating expenses of $2.3bn were $0.1bn or 5% higher than in 1Q25 on a
constant currency basis, primarily reflecting the phasing of the
performance-related pay accrual relative to 1Q25, continued investments in
Wealth, higher planned spend and investment in technology, and the impact of
inflation. These increases were partly mitigated by cost reductions from our
organisational simplification.
Corporate Centre - constant currency basis
Results - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Revenue (187 ) (1,569 ) (47 ) (140 ) >(100) (356 )
ECL (1 ) (24 ) 9 (10 ) >(100) -
Operating expenses 13 31 (74 ) 87 >100 (9 )
Share of profit/(loss) from associates and joint ventures 749 683 834 (85 ) (10 ) -
Profit before tax 574 (879 ) 722 (148 ) (20 ) (365 )
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
Management view of revenue - on a constant currency basis
Quarter ended
Variance
1Q26 vs. 1Q25
31 Mar 2026 31 Dec 2025 31 Mar 2025 of which strategic transactions(1)
$m $m $m $m % $m
Banking NII(2) (169 ) (68 ) (166 ) (3 ) (2 ) 36
Fee and other income 322 (41 ) 195 127 65 (128 )
Revenue excluding notable items 153 (109 ) 29 124 >100 (92 )
Notable items (340 ) (1,460 ) (76 ) (264 ) >(100) (264 )
Revenue(3) (187 ) (1,569 ) (47 ) (140 ) >(100) (356 )
RoTE (annualised)(4) (%) 2.2 5.1
RoTE excluding notable items (annualised)(4) (%) 5.5 6.2
1 Impact of strategic transactions classified as material notable items. For
further details, see 'Strategic transactions supplementary analysis' on page
25.
2 For a description of how we derive banking NII, see page 11. Corporate
Centre banking NII includes funding charges on property and technology assets,
and the banking NII of the French retained portfolio of home and other loans
prior to disposal.
3 Revenue from Markets Treasury, HSBC Holdings net interest expense and
hyperinflation are allocated out to the business segments, to align them
better with their revenue and expense. The total Markets Treasury revenue
component of this allocation for 1Q26 was $565m (4Q25: $506m; 1Q25: $528m).
4 For details of our RoTE calculation by business segment, see page 32.
Notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Revenue
Disposals, wind-downs, acquisitions and related costs (340 ) (1,450 ) (77 )
Dilution loss of interest in BoCom associate - -
Currency translation on revenue notable items - (10 ) 1
Operating expenses
Disposals, wind-downs, acquisitions and related costs (32 ) (51 ) (20 )
Restructuring and other related costs (76 ) (118 ) (61 )
Legal provisions (10 )
Currency translation on operating expenses notable items - 12 2
Impairment of interest in associate - - -
Currency translation on associate notable items - - -
1Q26 compared with 1Q25
Profit before tax of $0.6bn was $0.1bn or 20% lower than in 1Q25, on a
constant currency basis.
Revenue was $0.1bn lower on a constant currency basis, primarily due to the
impact of notable items. In 1Q26, these primarily comprised a disposal loss on
classification to held for sale of $0.3bn associated with the planned sale of
our business in Malta. In 1Q25, notable items included $0.1bn of fair value
losses on ADRs received as part of the sale consideration for our business in
Argentina.
Banking NII was a net expense of $0.2bn. This was stable compared with 1Q25 on
a constant currency basis. Banking NII in 1Q26 excluded from NII the internal
cost to fund trading and fair value net assets, predominantly in CIB, of
$2.4bn (4Q25: $2.6bn, 1Q25: $2.5bn).
Fee and other income was $0.1bn higher reflecting property asset disposal
gains of $0.2bn, partly offset by the non-recurrence of fair value gains on
non-qualifying hedges related to our retained French portfolio of home and
certain other loans.
Operating expenses were $0.1bn lower on a constant currency basis, primarily
driven by the phasing of recoveries of centrally managed costs and cost
reductions from our organisational simplification.
Share of profit from associates and joint ventures less impairment of $0.7bn
decreased by $0.1bn or 10% on a constant currency basis, primarily due to a
lower share of profit from BoCom following the dilution in the Group's stake
from 19.03% to 16.00% during 2025.
Supplementary financial information
Reported and constant currency results
Reported and constant currency results(1)
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Revenue
Reported 18,624 16,364 17,649
Currency translation - 100 670
Constant currency 18,624 16,464 18,319
Change in expected credit losses and other credit impairment charges
Reported (1,301 ) (901 ) (876 )
Currency translation - (9 ) (47 )
Constant currency (1,301 ) (910 ) (923 )
Operating expenses
Reported (8,721 ) (9,330 ) (8,102 )
Currency translation - (59 ) (351 )
Constant currency (8,721 ) (9,389 ) (8,453 )
Share of profit in associates and joint ventures less impairment
Reported 774 669 813
Currency translation - 12 32
Constant currency 774 681 845
Profit before tax
Reported 9,376 6,802 9,484
Currency translation - 44 304
Constant currency 9,376 6,846 9,788
Profit after tax
Reported 7,394 5,187 7,570
Currency translation - 31 238
Constant currency 7,394 5,218 7,808
Loans and advances to external customers (net)
Reported 1,001,957 988,399 944,708
Currency translation - (6,520 ) 21,094
Constant currency 1,001,957 981,879 965,802
External customer accounts
Reported 1,781,761 1,786,828 1,666,485
Currency translation - (14,249 ) 29,635
Constant currency 1,781,761 1,772,579 1,696,120
1 In the current period, constant currency results are equal to reported as
there is no currency translation.
Notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Revenue
Disposals, wind-downs, acquisitions and related costs(1) (501 ) (1,359 ) (91 )
Operating expenses
Disposals, wind-downs, acquisitions and related costs (50 ) (157 ) (50 )
Restructuring and other related costs(2) (128 ) (257 ) (141 )
Legal provisions - (11 ) -
Tax
Tax credit on notable items 48 19 65
1 1Q26 includes $0.2bn on the recycling in foreign currency translation
reserve losses arising on completion of the sale of our UK life insurance
business, HSBC Life (UK) Limited, and $0.3bn of disposal losses recognised
upon the 'held for sale' classification of HSBC Continental Europe's
shareholding in HSBC Bank Malta plc. 4Q25 includes recycling of cumulative
fair value losses of $1.5bn relating to the French retained portfolio of home
and certain other loans following the completion of its sale to a consortium
comprising Rothesay Life plc and CCF. 1Q25 includes $0.1bn of fair value
losses on ADRs in Grupo Financiero Galicia received as part of the sale
consideration for our business in Argentina.
2 Amounts include restructuring provisions related to organisational
simplification.
Reported and constant currency results - business segments
Reported and constant currency results - business segments
Quarter ended 31 Mar 2026
Hong UK CIB IWPB Corporate Total
Kong Centre
$m $m $m $m $m $m
Revenue 4,024 3,250 7,788 3,749 (187 ) 18,624
ECL (208 ) (203 ) (679 ) (210 ) (1 ) (1,301 )
Operating expenses (1,227 ) (1,402 ) (3,772 ) (2,333 ) 13 (8,721 )
Share of profit in associates and joint ventures - - - 25 749 774
Profit before tax 2,589 1,645 3,337 1,231 574 9,376
Loans and advances to external customers (net) 224,698 300,415 325,332 151,366 146 1,001,957
External customer accounts 528,277 345,963 628,239 278,927 355 1,781,761
Quarter ended 31 Dec 2025
Revenue 3,954 3,293 7,054 3,732 (1,569 ) 16,464
ECL (307 ) (101 ) (235 ) (243 ) (24 ) (910 )
Operating expenses (1,299 ) (1,478 ) (4,143 ) (2,500 ) 31 (9,389 )
Share of profit in associates and joint ventures - - - (2 ) 683 681
Profit before tax 2,348 1,714 2,676 987 (879 ) 6,846
Loans and advances to external customers (net) 222,313 295,988 313,293 150,146 139 981,879
External customer accounts 528,386 346,068 617,760 280,023 342 1,772,579
Quarter ended 31 Mar 2025
Revenue 3,915 3,107 7,651 3,693 (47 ) 18,319
ECL (315 ) (181 ) (181 ) (255 ) 9 (923 )
Operating expenses (1,136 ) (1,348 ) (3,674 ) (2,221 ) (74 ) (8,453 )
Share of profit in associates and joint ventures - - - 11 834 845
Profit before tax 2,464 1,578 3,796 1,228 722 9,788
Loans and advances to external customers (net) 226,337 280,976 312,230 146,081 178 965,802
External customer accounts 493,159 337,078 590,424 275,056 403 1,696,120
Notable items - business segments
Quarter ended 31 Mar 2026
Hong UK CIB IWPB Corporate Centre Total
Kong
$m $m $m $m $m $m
Revenue
Disposal, wind-downs, acquisitions and related costs(1) - - 6 (167 ) (340 ) (501 )
Operating expenses
Disposal, wind-downs, acquisitions and related costs - - (12 ) (6 ) (32 ) (50 )
Restructuring and other related costs(2) (4 ) (8 ) (19 ) (21 ) (76 ) (128 )
Quarter ended 31 Dec 2025
Revenue
Disposals, wind-downs, acquisitions and related costs(1) - - (3 ) 94 (1,450 ) (1,359 )
Operating expenses
Disposals, wind-downs, acquisitions and related costs - - (77 ) (29 ) (51 ) (157 )
Restructuring and other related costs(2) (6 ) (7 ) (73 ) (53 ) (118 ) (257 )
Legal provisions - - (1 ) - (10 ) (11 )
Quarter ended 31 Mar 2025
Revenue
Disposals, wind-downs, acquisitions and related costs(1) - - - (14 ) (77 ) (91 )
Operating expenses
Disposals, wind-downs, acquisitions and related costs - - (26 ) (4 ) (20 ) (50 )
Restructuring and other related costs(2) (7 ) (4 ) (46 ) (23 ) (61 ) (141 )
1 1Q26 includes $0.2bn on the recycling in foreign currency translation
reserve losses arising on completion of the sale of our UK life insurance
business HSBC Life (UK) Limited, and $0.3bn of disposal losses recognised upon
the 'held for sale' classification of HSBC Continental Europe's shareholding
in HSBC Bank Malta plc. 4Q25 includes recycling of cumulative fair value
losses of $1.5bn relating to the French retained portfolio of home and certain
other loans following the completion of its sale to a consortium comprising
Rothesay Life plc and CCF. 1Q25 includes $0.1bn of fair value losses on ADRs
in Grupo Financiero Galicia received as part of the sale consideration for our
business in Argentina.
2 Amounts include restructuring provisions related to organisational
simplification.
Reconciliation of reported results to constant currency results - business
segments
Quarter ended 31 Dec 2025
Hong UK CIB IWPB Corporate Total
Kong Centre
$m $m $m $m $m $m
Revenue
- Reported 3,970 3,247 7,009 3,686 (1,548 ) 16,364
- Currency translation (16 ) 46 45 46 (21 ) 100
- Constant currency 3,954 3,293 7,054 3,732 (1,569 ) 16,464
ECL
- Reported (307 ) (101 ) (235 ) (235 ) (23 ) (901 )
- Currency translation - - - (8 ) (1 ) (9 )
- Constant currency (307 ) (101 ) (235 ) (243 ) (24 ) (910 )
Operating expenses
- Reported (1,304 ) (1,456 ) (4,114 ) (2,466 ) 10 (9,330 )
- Currency translation 5 (22 ) (29 ) (34 ) 21 (59 )
- Constant currency (1,299 ) (1,478 ) (4,143 ) (2,500 ) 31 (9,389 )
Share of profit in associates and joint ventures
- Reported - - 1 (2 ) 670 669
- Currency translation - - (1 ) - 13 12
- Constant currency - - - (2 ) 683 681
Profit before tax
- Reported 2,359 1,690 2,661 983 (891 ) 6,802
- Currency translation (11 ) 24 15 4 12 44
- Constant currency 2,348 1,714 2,676 987 (879 ) 6,846
Loans and advances to external customers (net)
- Reported 223,730 299,539 314,942 150,047 141 988,399
- Currency translation (1,417 ) (3,551 ) (1,649 ) 99 (2 ) (6,520 )
- Constant currency 222,313 295,988 313,293 150,146 139 981,879
External customer accounts
- Reported 531,902 350,219 623,302 281,058 347 1,786,828
- Currency translation (3,516 ) (4,151 ) (5,542 ) (1,035 ) (5 ) (14,249 )
- Constant currency 528,386 346,068 617,760 280,023 342 1,772,579
Quarter ended 31 Mar 2025
Revenue
- Reported 3,927 2,898 7,371 3,511 (58 ) 17,649
- Currency translation (12 ) 209 280 182 11 670
- Constant currency 3,915 3,107 7,651 3,693 (47 ) 18,319
ECL
- Reported (316 ) (169 ) (173 ) (227 ) 9 (876 )
- Currency translation 1 (12 ) (8 ) (28 ) - (47 )
- Constant currency (315 ) (181 ) (181 ) (255 ) 9 (923 )
Operating expenses
- Reported (1,138 ) (1,260 ) (3,526 ) (2,106 ) (72 ) (8,102 )
- Currency translation 2 (88 ) (148 ) (115 ) (2 ) (351 )
- Constant currency (1,136 ) (1,348 ) (3,674 ) (2,221 ) (74 ) (8,453 )
Share of profit in associates and joint ventures
- Reported - - - 10 803 813
- Currency translation - - - 1 31 32
- Constant currency - - - 11 834 845
Profit before tax
- Reported 2,473 1,469 3,672 1,188 682 9,484
- Currency translation (9 ) 109 124 40 40 304
- Constant currency 2,464 1,578 3,796 1,228 722 9,788
Loans and advances to external customers (net)
- Reported 227,615 273,673 303,828 139,416 176 944,708
- Currency translation (1,278 ) 7,303 8,402 6,665 2 21,094
- Constant currency 226,337 280,976 312,230 146,081 178 965,802
External customer accounts
- Reported 496,370 328,316 574,978 266,428 393 1,666,485
- Currency translation (3,211 ) 8,762 15,446 8,628 10 29,635
- Constant currency 493,159 337,078 590,424 275,056 403 1,696,120
Reconciliation of reported risk-weighted assets to constant currency
risk-weighted assets - business segments
At 31 Mar 2026
Hong UK CIB IWPB Corporate Centre Total
Kong
$bn $bn $bn $bn $bn $bn
Risk-weighted assets
Reported 133.0 151.2 418.4 88.5 92.7 883.8
Constant currency 133.0 151.2 418.4 88.5 92.7 883.8
At 31 Dec 2025
Risk-weighted assets
Reported 136.2 149.6 415.4 89.9 97.5 888.6
Currency translation (0.7 ) (1.7 ) (2.8 ) (0.5 ) (0.2 ) (5.9 )
Constant currency 135.5 147.9 412.6 89.4 97.3 882.7
At 31 Mar 2025
Risk-weighted assets
Reported 142.3 136.8 400.3 86.5 87.4 853.3
Currency translation (0.5 ) 3.6 7.2 3.0 0.4 13.7
Constant currency 141.8 140.4 407.5 89.5 87.8 867.0
Strategic transactions supplementary analysis
The following table presents the selected impacts of strategic transactions to
the Group and our business segments for transactions that are classified as
material notable items. See page 5 for further information on material notable
items and the impact of strategic transactions.
Constant currency results
of which
1Q26 1Q25 Variance Hong UK CIB IWPB Corporate Centre
1Q26 vs. 1Q25 Kong
$m $m $m $m $m $m $m $m
Revenue (501 ) 86 (587 ) - - (14 ) (217 ) (356 )
- distorting impact of operating results - 178 (178 ) - - (20 ) (66 ) (92 )
- notable items (501 ) (92 ) (409 ) - - 6 (151 ) (264 )
ECL - - - - - - - -
Operating expenses (50 ) (134 ) 84 - - 73 20 (9 )
- distorting impact of operating results - (84 ) 84 - - 59 21 4
- notable items (50 ) (50 ) - - - 14 (1 ) (13 )
Share of profit in associates and joint ventures - - - - - - - -
Profit before tax (551 ) (48 ) (503 ) - - 59 (197 ) (365 )
- distorting impact of operating results - 94 (94 ) - - 39 (45 ) (88 )
- notable items (551 ) (142 ) (409 ) - - 20 (152 ) (277 )
Profit before tax(1)
- life insurance business in UK (182 ) (13 ) (169 ) - - - (164 ) (5 )
- wind-down of M&A and ECM in the UK, Europe and US (6 ) (74 ) 68 - - 68 - -
- retained French portfolio of home and certain other loans 1 88 (87 ) - - - - (87 )
- business in Malta (344 ) - (344 ) - - - - (344 )
- business in Argentina(2) - (92 ) 92 - - - - 92
- other strategic transactions (20 ) 43 (63 ) - - (9 ) (33 ) (21 )
1 Represents the impact on profit before tax due to strategic transactions,
inclusive of the notable items impacts and the distorting impact of operating
results. This does not represent the profit before tax of each disposed
business. In the case of wind-downs, there may be timing differences between
the recognition of operating cost impacts and operating revenue impacts. These
would arise in the event there is a timing lag between the impact of cost
actions and the resultant impact on operating revenue.
2 1Q25 impacts relate to fair value losses on ADRs in Grupo Financiero Galicia
received as part of the sale consideration for our business in Argentina.
Supplementary tables for Wealth
Wealth balances
The following table shows our Wealth balances, which include invested assets
and Wealth deposits. From 1 January 2026, we have updated the definition of
our Wealth balances to exclude Asset Management third-party distribution. This
will enhance comparability with industry peers.
Wealth balances(1)
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$bn $bn $bn
Private Bank invested assets(2) 458 465 403
Retail invested assets 502 490 431
Invested assets(1) 960 955 834
- of which: The Hongkong and Shanghai Banking Corporation Limited 661 648 560
Wealth deposits (Premier and Private Bank)(3) 610 608 566
- of which: The Hongkong and Shanghai Banking Corporation Limited 407 407 374
Total reported Wealth balances 1,570 1,563 1,400
- of which: The Hongkong and Shanghai Banking Corporation Limited 1,068 1,055 934
1 Invested assets are not reported on the Group's balance sheet, except where
it is deemed that we are acting as principal rather than agent in our role as
investment manager.
2 Private Bank client balances, which comprise invested assets and customer
deposits, were $562bn (4Q25: $566bn, 1Q25: $498bn).
3 Premier and Private Bank deposits, which include Prestige deposits in Hang
Seng Bank, form part of the total IWPB, Hong Kong and UK businesses' customer
accounts balance on page 27.
Net new money
Net new money ('NNM') represents our net customer inflows from Private Bank
and Retail invested assets and Wealth deposits. It excludes foreign exchange
movements and market and other movements not relating to client
inflows/outflows, which are reported within 'foreign exchange and others' and
'net market movements', respectively. This metric excludes net customer
inflows from Asset Management third-party distribution. From 1 January 2026,
we disclose NNM as our key Wealth metric, offering greater comparability to
industry peers. We no longer disclose invested assets as a key metric.
Net new money
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$bn $bn $bn
Opening balance 1,563 1,537 1,359
Net new money(1) 39 26 23
- of which: net new invested assets 34 3 17
- of which: change in deposits 5 23 6
Net market movements (21 ) (9 ) 14
Foreign exchange and others(2) (11 ) 9 4
Closing balance 1,570 1,563 1,400
Net new money - The Hongkong and Shanghai Banking Corporation Limited 34 19 19
- of which: net new invested assets 33 - 17
- of which: change in deposits 1 19 2
1 Clients' assets are translated at the average quarterly rates of foreign
exchange applicable to the respective quarters, with the effects of currency
translation reported separately.
2 Includes foreign exchange on Wealth deposits.
In addition to the Wealth balances reported above, our Asset Management
business also manages assets related to third-party distribution. Total
invested assets of our Asset Management business were $863bn (4Q25: $866bn;
1Q25: $748bn), including $291bn related to Wealth balances (4Q25: $286bn;
1Q25: $251bn), and $572bn related to third-party distribution (4Q25: $580bn;
1Q25: $497bn). Invested asset balances related to The Hongkong and Shanghai
Banking Corporation Limited were $263bn (4Q25: $260bn; 1Q25: $234bn).
Net new invested assets, including third‑party distribution, were $11bn
(4Q25: $7bn; 1Q25: $12bn). This included balances related to The Hongkong and
Shanghai Banking Corporation Limited of $8bn (4Q25: $(5)bn; 1Q25: $4bn).
Net market movements, foreign exchange and other movements, including
third-party distribution were $(14)bn (4Q25: $7bn; 1Q25: $5bn), including
$(5)bn for The Hongkong and Shanghai Banking Corporation Limited (4Q25: nil;
1Q25: $7bn).
Reported and constant currency results - legal entities
Reported and constant currency results - legal entities
Quarter ended 31 Mar 2026
HSBC UK Bank plc HSBC Bank plc The Hongkong and HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities(1) Holding companies, shared service centres and intra-Group eliminations Total
Shanghai
Banking
Corporation
Limited
$m $m $m $m $m $m $m $m $m
Revenue 3,622 2,536 10,127 637 1,249 973 678 (1,198 ) 18,624
ECL (208 ) (456 ) (312 ) (93 ) (50 ) (150 ) (32 ) - (1,301 )
Operating expenses (1,452 ) (1,809 ) (3,822 ) (325 ) (804 ) (542 ) (376 ) 409 (8,721 )
Share of profit/(loss) in associates and joint ventures - 18 592 - - 6 160 (2 ) 774
Profit/(loss) before tax 1,962 289 6,585 219 395 287 430 (791 ) 9,376
Loans and advances to external customers (net) 311,494 103,572 479,119 24,420 55,361 24,068 3,910 13 1,001,957
External customer accounts 370,603 313,571 919,570 38,182 99,951 28,285 11,575 24 1,781,761
1 Includes the results of entities located in Türkiye, Egypt and Saudi Arabia
(including our share of the results of SAB), which do not consolidate into
HSBC Bank Middle East Limited. These entities had an aggregated impact on
Group reported profit before tax of $0.4bn.
Notable items - legal entities
Quarter ended 31 Mar 2026
HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total
$m $m $m $m $m $m $m $m $m
Revenue
Disposals, acquisitions and related costs(1) - (295 ) - - - - - (206 ) (501 )
Operating expenses
Disposals, acquisitions and related costs - (31 ) (10 ) - (3 ) - (1 ) (5 ) (50 )
Restructuring and other related costs(2) (22 ) (6 ) (30 ) (2 ) (7 ) (14 ) (1 ) (46 ) (128 )
1 1Q26 includes $0.2bn on the recycling in foreign currency translation
reserve losses arising on completion of the sale of our UK life insurance
business, HSBC Life (UK) Limited, and $0.3bn of disposal losses recognised
upon the 'held for sale' classification of HSBC Continental Europe's
shareholding in HSBC Bank Malta plc.
2 Amounts relate to organisational simplification provision recognised in
1Q26.
Reconciliation of reported results to constant currency results - legal
entities
Quarter ended 31 Dec 2025
HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities(1) Holding companies, shared service centres and intra-Group eliminations Total
$m $m $m $m $m $m $m $m $m
Revenue
- Reported 3,600 1,239 8,775 711 1,203 905 862 (931 ) 16,364
- Currency translation 50 12 10 1 (1 ) 38 (5 ) (5 ) 100
- Constant currency 3,650 1,251 8,785 712 1,202 943 857 (936 ) 16,464
ECL
- Reported (101 ) (80 ) (427 ) (23 ) (32 ) (202 ) (3 ) (33 ) (901 )
- Currency translation (2 ) (1 ) 2 - 1 (8 ) - (1 ) (9 )
- Constant currency (103 ) (81 ) (425 ) (23 ) (31 ) (210 ) (3 ) (34 ) (910 )
Operating expenses
- Reported (1,538 ) (2,108 ) (4,081 ) (369 ) (829 ) (579 ) (500 ) 674 (9,330 )
- Currency translation (20 ) (9 ) (10 ) (1 ) - (24 ) - 5 (59 )
- Constant currency (1,558 ) (2,117 ) (4,091 ) (370 ) (829 ) (603 ) (500 ) 679 (9,389 )
Share of profit/(loss) in associates and joint ventures
- Reported 1 22 486 - - 2 159 (1 ) 669
- Currency translation (1 ) - 12 - - - - 1 12
- Constant currency - 22 498 - - 2 159 - 681
Profit/(loss) before tax
- Reported 1,962 (927 ) 4,753 319 342 126 518 (291 ) 6,802
- Currency translation 27 2 14 - - 6 (5 ) - 44
- Constant currency 1,989 (925 ) 4,767 319 342 132 513 (291 ) 6,846
Loans and advances to external customers (net)
- Reported 310,116 106,409 467,842 22,618 52,178 25,252 3,971 13 988,399
- Currency translation (3,677 ) (1,431 ) (1,291 ) (5 ) - 35 (152 ) 1 (6,520 )
- Constant currency 306,439 104,978 466,551 22,613 52,178 25,287 3,819 14 981,879
External customer accounts
- Reported 376,903 321,451 911,725 37,010 99,458 29,493 10,781 7 1,786,828
- Currency translation (4,468 ) (4,208 ) (4,783 ) (20 ) - 41 (812 ) 1 (14,249 )
- Constant currency 372,435 317,243 906,942 36,990 99,458 29,534 9,969 8 1,772,579
1 Includes the results of entities located in Türkiye, Egypt and Saudi Arabia
(including our share of the results of SAB), which do not consolidate into
HSBC Bank Middle East Limited. These entities had an aggregated impact on
Group reported profit before tax of $0.4bn and constant currency profit before
tax of $0.4bn.
Notable items - legal entities (continued)
Quarter ended 31 Dec 2025
HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total
$m $m $m $m $m $m $m $m $m
Revenue
Disposals, wind-downs, acquisitions and related costs(1) - (1,386 ) - 72 (1 ) - - (44 ) (1,359 )
Operating expenses
Disposals, wind-downs, acquisitions and related costs (2 ) (129 ) (24 ) (3 ) 2 - (2 ) 1 (157 )
Restructuring and other related costs(2) (54 ) (111 ) (101 ) (6 ) (12 ) (36 ) (4 ) 67 (257 )
Legal provisions - 224 - - - - - (235 ) (11 )
1 Includes recycling of cumulative fair value losses of $1.5bn relating to the
French retained portfolio of home and certain other loans following the
completion of its sale to a consortium comprising Rothesay Life plc and CCF.
2 Amounts relate to organisational simplification provision recognised in
4Q25.
Reconciliation of reported results to constant currency results - legal
entities (continued)
Quarter ended 31 Mar 2025
HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities(1) Holding companies, shared service centres and intra-Group eliminations Total
$m $m $m $m $m $m $m $m $m
Revenue
- Reported 3,211 2,720 9,382 619 1,171 823 593 (870 ) 17,649
- Currency translation 225 237 69 - - 134 - 5 670
- Constant currency 3,436 2,957 9,451 619 1,171 957 593 (865 ) 18,319
ECL
- Reported (187 ) (39 ) (353 ) (26 ) (86 ) (180 ) (5 ) - (876 )
- Currency translation (14 ) (5 ) - - - (30 ) - 2 (47 )
- Constant currency (201 ) (44 ) (353 ) (26 ) (86 ) (210 ) (5 ) 2 (923 )
Operating expenses
- Reported (1,313 ) (1,665 ) (3,538 ) (310 ) (819 ) (459 ) (317 ) 319 (8,102 )
- Currency translation (91 ) (144 ) (38 ) - (1 ) (74 ) (1 ) (2 ) (351 )
- Constant currency (1,404 ) (1,809 ) (3,576 ) (310 ) (820 ) (533 ) (318 ) 317 (8,453 )
Share of profit/(loss) in associates and joint ventures
- Reported - (3 ) 635 - - 4 177 - 813
- Currency translation - - 32 - - - - - 32
- Constant currency - (3 ) 667 - - 4 177 - 845
Profit/(loss) before tax
- Reported 1,711 1,013 6,126 283 266 188 448 (551 ) 9,484
- Currency translation 120 88 63 - (1 ) 30 (1 ) 5 304
- Constant currency 1,831 1,101 6,189 283 265 218 447 (546 ) 9,788
Loans and advances to external customers (net)
- Reported 282,969 101,516 453,681 21,085 56,648 23,843 4,967 (1 ) 944,708
- Currency translation 7,552 5,405 5,064 1 - 3,257 (186 ) 1 21,094
- Constant currency 290,521 106,921 458,745 21,086 56,648 27,100 4,781 - 965,802
External customer accounts
- Reported 349,850 307,594 839,433 34,572 97,533 26,701 10,760 42 1,666,485
- Currency translation 9,337 12,878 4,498 7 - 3,647 (732 ) - 29,635
- Constant currency 359,187 320,472 843,931 34,579 97,533 30,348 10,028 42 1,696,120
1 Includes the results of entities located in Türkiye, Egypt and Saudi Arabia
(including our share of the results of SAB), which do not consolidate into
HSBC Bank Middle East Limited. These entities had an aggregated impact on
Group reported profit before tax of $0.4bn and constant currency profit before
tax of $0.4bn.
Notable items - legal entities (continued)
Quarter ended 31 Mar 2025
HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc. Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total
$m $m $m $m $m $m $m $m $m
Revenue
Disposals, wind-downs, acquisitions and related costs(1) - (14 ) - - - - - (77 ) (91 )
Operating expenses
Disposals, wind-downs, acquisitions and related costs - (12 ) (8 ) (5 ) (10 ) - - (15 ) (50 )
Restructuring and other related costs(2) (9 ) (8 ) (19 ) (2 ) (6 ) (1 ) (20 ) (76 ) (141 )
1 Includes $0.1bn of fair value losses on ADRs in Grupo Financiero Galicia
received as part of the sale consideration for our business in Argentina.
2 Amounts relate to organisational simplification provision recognised in
1Q25.
Alternative performance measures
The following tables provide the calculation, definition and reconciliation of
alternative performance measures to the closest reported performance measure.
For further details and an explanation of their basis of preparation,
including constant currency, notable items and material notable items, and the
impact of strategic transactions and hyperinflationary accounting, see page 5.
items reported under operating expenses
Alternative performance measure Definition
Reported revenue excluding notable items Reported revenue after excluding notable items reported under revenue
Reported profit before tax excluding notable items Reported profit before tax after excluding notable items reported under
revenue less notable
Constant currency revenue excluding notable items Reported revenue excluding notable items and the impact of foreign exchange
translation
Constant currency profit before tax excluding notable items Reported profit before tax excluding notable items and the impact of foreign
exchange translation
Constant currency revenue excluding notable items and strategic transactions Reported revenue excluding notable items, strategic transactions and the
impact of foreign
exchange translation
Constant currency profit before tax excluding notable items and strategic Reported profit before tax excluding notable items, strategic transactions and
transactions the impact of
foreign exchange translation
Return on average ordinary shareholders' equity ('RoE') Profit attributable to the ordinary shareholders
Average ordinary shareholders' equity
Return on average tangible equity ('RoTE') Profit attributable to the ordinary shareholders, excluding impairment
of goodwill and other intangible assets
Average ordinary shareholders' equity adjusted for goodwill and intangibles
Return on average tangible equity ('RoTE') excluding notable items Profit attributable to the ordinary shareholders, excluding impairment of
goodwill
and other intangible assets and notable items
Average ordinary shareholders' equity adjusted for goodwill
and intangibles
Net asset value per ordinary share Total ordinary shareholders' equity(1)
Basic number of ordinary shares in issue after deducting own shares held
Tangible net asset value per ordinary share Tangible ordinary shareholders' equity(2)
Basic number of ordinary shares in issue after deducting own shares held
Banking net interest income Banking net interest income adjusts our reported NII, primarily for the impact
of funding trading
and fair value activities reported in interest expense and to exclude third
party insurance NII(3)
Expected credit losses and other credit impairment charges as a % of average Annualised constant currency ECL
gross loans and advances to customers
Constant currency average gross loans and advances to customers
Expected credit losses and other credit impairment charges as a % of average Annualised constant currency ECL
gross loans and advances to customers, including held for sale
Constant currency average gross loans and advances to customers,
including held for sale
Target basis operating expenses Reported operating expenses excluding notable items, foreign exchange
translation and other excluded items
Basic earnings per share excluding material notable items and related impacts Profit attributable to ordinary shareholders excluding material notable
items and related impacts
Weighted average number of ordinary shares outstanding after deducting
own shares held
1 Total ordinary shareholders' equity is total shareholders' equity less
non-cumulative preference shares and capital securities.
2 Tangible ordinary shareholders' equity is total ordinary shareholders'
equity excluding goodwill and other intangible assets (net of deferred tax).
3 For details on the calculation of banking NII, see page 11.
Constant currency revenue and profit before tax excluding notable items and
strategic transactions
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Revenue
Reported 18,624 16,364 17,649
Notable items 501 1,359 91
Reported revenue excluding notable items 19,125 17,723 17,740
Currency translation(1) - 108 671
Constant currency revenue excluding notable items 19,125 17,831 18,411
Constant currency impact of strategic transactions (distorting impact of - N/A (178 )
operating results between periods)(2)
Constant currency revenue excluding notable items and strategic transactions 19,125 N/A 18,233
Profit before tax
Reported 9,376 6,802 9,484
Notable items 679 1,784 282
Reported profit before tax excluding notable items 10,055 8,586 9,766
Currency translation(1) - 44 312
Constant currency profit before tax excluding notable items 10,055 8,630 10,078
Constant currency impact of strategic transactions (distorting impact of - N/A (94 )
operating results between periods)(2)
Constant currency profit before tax excluding notable items and strategic 10,055 N/A 9,984
transactions
1 Currency translation on the reported balance excluding currency translation
on notable items.
2 For more details of strategic transactions, see 'Strategic transactions
supplementary analysis' on page 25.
Return on average ordinary shareholders' equity, return on average tangible
equity and return on average tangible equity excluding notable items
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Profit after tax
Profit attributable to the ordinary shareholders of the parent company 6,938 4,719 6,932
Impairment of goodwill and other intangible assets (net of tax) 30 80 -
Profit attributable to the ordinary shareholders, excluding goodwill and other 6,968 4,799 6,932
intangible assets impairment
Impact of notable items(1) 601 1,685 216
Profit attributable to the ordinary shareholders, excluding goodwill, other 7,569 6,484 7,148
intangible assets impairment and notable items
Equity
Average total shareholders' equity 197,522 194,828 187,892
Effect of average preference shares and other equity instruments (21,463 ) (20,716 ) (18,894 )
Average ordinary shareholders' equity 176,059 174,112 168,998
Effect of goodwill and other intangibles (net of deferred tax) (12,315 ) (12,309 ) (11,650 )
Average tangible equity 163,744 161,803 157,348
Ratio % % %
Return on average ordinary shareholders' equity (annualised) 16.0 10.8 16.6
Return on average tangible equity (annualised) 17.3 11.8 17.9
Return on average tangible equity excluding notable items (annualised) 18.7 15.9 18.4
1 For details of notable items, see page 22.
To better align our RoTE excluding notable items measure with market practice,
from our 2025 full-year results we no longer adjust the 'average tangible
equity' for the post-tax impact of notable items in each period. Comparatives
have been re-presented.
Return on average tangible equity by business segment
Quarter ended 31 Mar 2026
Hong UK CIB IWPB Corporate Total
Kong Centre
$m $m $m $m $m $m
Profit before tax 2,589 1,645 3,337 1,231 574 9,376
Tax expense (430 ) (469 ) (646 ) (254 ) (183 ) (1,982 )
Profit after tax 2,159 1,176 2,691 977 391 7,394
Less attributable to: preference shareholders, other equity holders, (76 ) (47 ) (213 ) (32 ) (88 ) (456 )
non-controlling interests
Profit attributable to ordinary shareholders of the parent company 2,083 1,129 2,478 945 303 6,938
Other adjustments 52 80 (45 ) (8 ) (49 ) 30
Profit attributable to ordinary shareholders 2,135 1,209 2,433 937 254 6,968
Impact of notable items 3 6 19 191 382 601
Profit attributable to ordinary shareholders excluding notable items 2,138 1,215 2,452 1,128 636 7,569
Average tangible shareholders' equity 19,383 22,772 57,922 16,716 46,951 163,744
RoTE (%) (annualised) 44.7 21.5 17.0 22.7 2.2 17.3
RoTE (%), excluding notable items (annualised) 44.7 21.6 17.2 27.4 5.5 18.7
Quarter ended 31 Mar 2025
Profit before tax 2,473 1,469 3,672 1,188 682 9,484
Tax expense (466 ) (419 ) (797 ) (236 ) 4 (1,914 )
Profit after tax 2,007 1,050 2,875 952 686 7,570
Less attributable to: preference shareholders, other equity holders, (271 ) (51 ) (182 ) (64 ) (70 ) (638 )
non-controlling interests
Profit attributable to ordinary shareholders of the parent company 1,736 999 2,693 888 616 6,932
Other adjustments 68 59 (53 ) (13 ) (61 ) -
Profit attributable to ordinary shareholders 1,804 1,058 2,639 876 555 6,932
Impact of notable items 6 3 58 31 118 216
Profit attributable to ordinary shareholders excluding notable items 1,810 1,061 2,697 907 673 7,148
Average tangible shareholders' equity 19,866 19,616 55,396 18,511 43,959 157,348
RoTE (%) (annualised) 36.8 21.9 19.3 19.2 5.1 17.9
RoTE (%), excluding notable items (annualised) 37.0 21.9 19.7 19.9 6.2 18.4
Net asset value and tangible net asset value per ordinary share
At
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Total shareholders' equity 196,819 198,225 190,810
Preference shares and other equity instruments (22,211 ) (20,716 ) (18,719 )
Total ordinary shareholders' equity 174,608 177,509 172,091
Goodwill and intangible assets (net of deferred tax) (12,273 ) (12,356 ) (11,693 )
Tangible ordinary shareholders' equity 162,335 165,153 160,398
Basic number of $0.50 ordinary shares outstanding, after deducting own shares 17,164 17,140 17,668
held (millions)
Value per share $ $ $
Net asset value per ordinary share 10.17 10.36 9.74
Tangible net asset value per ordinary share 9.46 9.64 9.08
ECL as a % of average gross loans and advances to customers, and ECL as a % of
average gross loans and advances to customers, including held for sale
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Expected credit losses and other credit impairment charges ('ECL') (1,301 ) (901 ) (876 )
Currency translation - (9 ) (47 )
Constant currency (1,301 ) (910 ) (923 )
Average gross loans and advances to customers 1,006,193 996,242 947,588
Currency translation (3,301 ) (6,483 ) 27,685
Constant currency 1,002,892 989,759 975,273
Average gross loans and advances to customers, including held for sale 1,009,774 998,816 948,700
Currency translation (3,336 ) (6,534 ) 27,781
Constant currency 1,006,438 992,282 976,481
Ratios % % %
Expected credit losses and other credit impairment charges (annualised) as a % 0.53 0.36 0.38
of average gross loans and advances to customers (%)
Expected credit losses and other credit impairment charges (annualised) as a % 0.52 0.36 0.38
of average gross loans and advances to customers, including held for sale (%)
Target basis operating expenses
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Reported operating expenses 8,721 9,330 8,102
Notable items (178 ) (425 ) (191 )
- disposals, wind-downs, acquisitions and related costs (50 ) (157 ) (50 )
- restructuring and other related costs(1) (128 ) (257 ) (141 )
- legal provisions - (11 ) -
Currency translation(2) - 67 344
Excluding the impact of retranslating prior period costs of hyperinflationary - 2 9
economies at constant currency foreign exchange rate
Target basis operating expenses 8,543 8,974 8,264
1 Amounts include restructuring provisions related to the organisational
simplification.
2 Currency translation on reported operating expenses, excluding currency
translation on notable items.
Basic earnings per share excluding material notable items and related impacts
Quarter ended
31 Mar 2026 31 Dec 2025 31 Mar 2025
$m $m $m
Profit attributable to shareholders of company 7,345 4,944 7,324
Coupon payable on capital securities classified as equity (407 ) (225 ) (392 )
Profit attributable to ordinary shareholders of company 6,938 4,719 6,932
Legal provisions - 10 -
Impact of disposals, wind-downs, acquisitions and related costs(1) 535 1,570 68
Profit attributable to ordinary shareholders of company excluding material 7,473 6,299 7,000
notable items and related impacts
Number of shares
Weighted average basic number of ordinary shares after deducting own shares 17,129 17,136 17,769
held (millions)
Basic earnings per share ($) 0.41 0.28 0.39
Basic earnings per share excluding material notable items and related impacts 0.44 0.37 0.39
($)
1 1Q26 includes $0.2bn on the recycling of foreign currency translation
reserve losses arising on completion of the sale of our UK life insurance
business, HSBC Life (UK) Limited, and $0.3bn of disposal losses recognised
upon the 'held for sale' classification of HSBC Continental Europe's
shareholding in HSBC Bank Malta plc. 4Q25 includes recycling of cumulative
fair value losses of $1.5bn relating to the French retained portfolio of home
and certain other loans following the completion of its sale. 1Q25 includes
$0.1bn of fair value losses on ADRs in Grupo Financiero Galicia received as
part of the sale consideration for our business in Argentina.
Risk
Managing risk
We maintain a proactive approach to managing our exposure to economic,
financial and geopolitical risks, supported by continuous monitoring and
review. Developments in these areas have historically affected, and may in the
future materially affect, HSBC's customers, operations and financial risk
profile.
The conflict in the Middle East is a source of uncertainty, and may adversely
impact HSBC and our customers, including through increased market volatility,
higher oil and gas prices and disruptions to supply chains. The duration and
direction of the conflict is likely to determine the extent of its economic
and financial impact.
Before the onset of the conflict in the Middle East on 28 February 2026, the
global economy showed continued resilience to unpredictable US trade policies
and heightened geopolitical tensions. The conflict and the resultant energy
supply shock have increased uncertainty around global GDP growth. The surge in
oil and gas prices raises the risk of higher inflation and lower GDP growth.
For some countries, particularly those in the Middle East region, where
travel, logistics and other sectors have also been affected, the impact is
already significant. Evidence of broader supply chain disruptions is emerging
and there could be long-lasting implications for the direction of trade, and
for energy, military and economic security. We maintain close oversight of the
developments, with a focus on potential impacts on our Gulf operations, as
well as our customers and suppliers.
Trade and tariff policies also remain a source of uncertainty for businesses
and consumers. Changes to tariff rates, including the application of
sector-specific levies, may deter capital investment and consumer spending,
disrupt supply chains and reduce global trade growth. The reconfiguration of
trade and supply routes may offer new opportunities for investment and growth,
but these developments could also adversely affect the Group and our customers
who operate in some of the most affected markets.
We remain subject to interest rate risk, which can affect net interest income,
the fair value of our assets and liabilities, and overall financial
performance. Interest rate volatility has increased as higher oil and gas
prices have raised inflation expectations and concern that government spending
may rise to help reduce the financial impact on households. Prior to the
conflict in the Middle East, markets had expected both the US Federal Reserve
and the Bank of England ('BoE') to lower interest rates during 2026, but
renewed inflation risk has raised uncertainty around their future path. In the
year to date, the US Federal Reserve has left interest rates unchanged at
3.5%-3.75% and assessed that inflation risks have increased. The BoE has also
left the policy rate unchanged at 3.75%, judging that inflation pressures have
increased, but assessing that the impact on the economy would depend on the
scale and duration of the conflict in the Middle East. Higher interest rates
may reduce loan demand across key consumer and business segments, may weaken
credit quality and may weigh on real estate and other asset prices. By
contrast, lower interest rates could pressure net interest margins and
adversely affect profitability.
Market volatility has increased due to rising geopolitical risks, higher
energy prices and changing interest rate expectations. The duration and
severity of market disruption remain uncertain and could change significantly
if geopolitical outcomes differ materially from market expectations.
Our risk profile may be influenced by fiscal policies, public deficits and
levels of sovereign indebtedness. In many of our major markets, government
debt levels are rising due to higher social welfare commitments and increased
expenditure on defence, energy security and climate transition. Higher
long-term interest rates across major economies could adversely impact the
fiscal capacity and debt sustainability of highly-indebted sovereigns. The
rise in funding costs in our major markets could reduce the potential for GDP
growth by increasing the cost of borrowing, while also creating refinancing
risks for our customers and counterparties.
Exchange rate volatility may also affect our risk exposure through
mark-to-market changes in trading positions and the translation effects of
currency movements.
Investment in the artificial intelligence ('AI') and technology sectors and
the development of those technologies is being monitored. While AI may deliver
improvements to productivity, there remains a risk that the expected gains
will fail to materialise and that a disruptive correction to the valuations of
AI and technology companies will follow. Other risks relating to AI include
the potential disruption of established business models and an increase in
unemployment as a result of improvements in technology. These risks could
affect HSBC's risk profile and earnings by impairing the creditworthiness of
borrowers, increasing the financial vulnerability of customers and decreasing
the value of collateral and other claims.
We continue to monitor the Russia-Ukraine war and any indication of other
potential military action or conflict elsewhere, given that these are key
sources of uncertainty that may impact HSBC and our customers, including
through increased market volatility and supply chain disruptions. Heightened
strategic competition between the US and China, including cross-border
investment restrictions, is also affecting the configuration of global supply
chains, which may in turn affect the Group's operations.
Sanctions and restrictions on trade and investment are continually evolving in
response to geopolitical events and may adversely affect the Group, its
customers and the markets in which the Group operates. These factors may
result in increased legal, regulatory, reputational and market risks, and a
more complex operating environment.
In Hong Kong, we continue to observe signs of a recovery in the residential
property sector. Sentiment in the retail property sector also continues to
improve, driven by positive retail sales growth, although the office property
sector is still facing pressure from oversupply. Market liquidity remains
tight overall, particularly for mid-sized and sub-investment grade corporates.
The conflict in the Middle East will likely create negative sentiment and
could result in a softening of demand as a result of inflationary pressures
and increased uncertainty over the trajectory of interest rates. In mainland
China, the property market remains weak, with government stimulus yet to
trigger a material improvement in buyer sentiment.
In the first quarter of 2026, for the reported ECL allowance, an additional
scenario, the Downside 1, was introduced to help address the risks associated
with the conflict in the Middle East. Management adjustments to ECL were
applied to reflect sector or portfolio risks that are not fully captured by
our models, including those in relation to the conflict in the Middle East. We
continue to monitor, and seek to manage, the potential implications of all the
above developments on our customers and our business.
At 31 March 2026, our CET1 ratio decreased to 14.0% from 14.9% at 31 December
2025, and our liquidity coverage ratio ('LCR') was 135%, down from 137% at 31
December 2025.
Ø For further details of our Central and other economic scenarios, see page
38.
Ø For further details on our CET1 ratio, see 'Capital risk' on page 46.
Credit risk
Summary of credit risk
At 31 March 2026, gross loans and advances to banks and customers of $1,113bn
increased by $6.0bn on a reported basis compared with 31 December 2025. Gross
loans and advances to customers increased by $14.2bn and gross loans and
advances to banks decreased by $8.2bn. This included total adverse foreign
exchange movements of $7.5bn.
On a constant currency basis, the increase of $20.8bn in loans and advances to
customers was driven by higher balances in our CIB business (up $12.6bn), our
UK business segment (up $4.4bn) and in our Hong Kong business segment (up
$2.6bn).
The increase in CIB was driven by higher balances in our entities in Asia, the
US and the Middle East across several sectors.
In our UK business, the increase was primarily driven by higher corporate and
commercial exposures in addition to mortgage growth.
The increase in our Hong Kong business was primarily driven by higher balances
across other personal lending and corporate and commercial exposures.
At 31 March 2026, the allowance for ECL of $12.0bn increased by $0.8bn
compared with 31 December 2025, including write-offs of $0.7bn and favourable
foreign exchange movements of $0.1bn. The $12.0bn allowance comprised $11.5bn
in respect of assets held at amortised cost and $0.5bn in respect of loan
commitments and financial guarantees.
On a constant currency basis, the allowance for ECL in relation to loans and
advances to customers increased by $0.7bn. This was attributable to:
- a $0.7bn increase in wholesale loans and advances to
customers, which included a $0.6bn increase in stage 3 and a $0.1bn increase
in stages 1 and 2; and
- a broadly unchanged allowance for ECL personal loans and
advances to customers.
The ECL charge for the first three months of 2026 was $1.3bn (1Q25: $0.9bn),
inclusive of recoveries. It comprised: $0.7bn in respect of CIB; $0.2bn in
respect of IWPB; $0.2bn in respect of the Hong Kong business segment; and
$0.2bn in respect of the UK business segment.
Ø For further details on ECL charges in each of our business segments, see
pages 16 and 36.
The charge in 1Q26 primarily reflected a $0.4bn fraud-related, secondary,
securitisation exposure with a financial sponsor in the UK in our CIB
business, as well as an increase in allowances of $0.3bn to reflect heightened
uncertainty and a deterioration in the forward economic outlook due to the
onset of the conflict in the Middle East on 28 February 2026. Net ECL charges
in the Hong Kong CRE and mainland China CRE sectors were immaterial in 1Q26.
Summary of financial instruments to which the impairment requirements in IFRS
9 are applied - by business segment at 31 March 2026
Gross carrying/nominal amount Allowance for ECL(1)
Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total
$m $m $m $m $m $m $m $m $m $m $m $m
Loans and advances to customers at amortised cost 228,726 302,409 329,049 152,930 182 1,013,296 (4,028 ) (1,994 ) (3,717 ) (1,564 ) (36 ) (11,339 )
Loans and advances to banks at amortised cost 9,151 6,668 65,944 16,854 1,692 100,309 (1 ) - (7 ) (2 ) (2 ) (12 )
Other financial assets measured at amortised cost 51,985 95,689 645,100 58,705 67,599 919,078 (12 ) (8 ) (91 ) (42 ) (4 ) (157 )
- cash and balances at central banks 4,444 41,082 154,375 13,461 1,345 214,707 - - - - - -
- Hong Kong Government certificates of indebtedness - - - - 44,727 44,727 - - - - - -
- reverse repurchase agreements - non-trading 3,328 25,661 279,775 5,481 619 314,864 - - - - - -
- financial investments 38,942 25,666 81,786 28,484 16,741 191,619 (2 ) (1 ) (3 ) (4 ) - (10 )
- assets held for sale(2) - 14 4,093 4,776 21 8,904 - - (31 ) (28 ) - (59 )
- other assets(3) 5,271 3,266 125,071 6,503 4,146 144,257 (10 ) (7 ) (57 ) (10 ) (4 ) (88 )
Total on-balance sheet 289,862 404,766 1,040,093 228,489 69,473 2,032,683 (4,041 ) (2,002 ) (3,815 ) (1,608 ) (42 ) (11,508 )
Loan and other credit-related commitments 106,665 102,707 406,593 125,155 1,207 742,327 (25 ) (109 ) (238 ) (4 ) - (376 )
Financial guarantees 622 1,052 14,925 1,730 - 18,329 (1 ) (19 ) (57 ) - - (77 )
Total off-balance sheet(4) 107,287 103,759 421,518 126,885 1,207 760,656 (26 ) (128 ) (295 ) (4 ) - (453 )
At 31 Mar 2026 397,149 508,525 1,461,611 355,374 70,680 2,793,339 (4,067 ) (2,130 ) (4,110 ) (1,612 ) (42 ) (11,961 )
Fair value Memorandum allowance for ECL(5)
Hong Kong UK CIB IWPB Corporate Total Hong Kong UK CIB IWPB Corporate Total
Centre Centre
$m $m $m $m $m $m $m $m $m $m $m $m
Debt instruments measured at fair value through other comprehensive income 135,751 27,761 175,329 49,254 1,220 389,315 (2 ) (1 ) (20 ) (8 ) - (31 )
('FVOCI')
Summary of financial instruments to which the impairment requirements in IFRS
9 are applied - by business segment at 31 December 2025
Gross carrying/nominal amount Allowance for ECL(1)
Hong Kong UK CIB IWPB Corporate Centre Total Hong Kong UK CIB IWPB Corporate Centre Total
$m $m $m $m $m $m $m $m $m $m $m $m
Loans and advances to customers at amortised cost 227,608 301,537 318,113 151,657 176 999,091 (3,878 ) (1,998 ) (3,170 ) (1,610 ) (36 ) (10,692 )
Loans and advances to banks at amortised cost 11,696 7,302 67,909 16,630 4,932 108,469 - - (4 ) (2 ) (1 ) (7 )
Other financial assets measured at amortised cost 57,228 101,338 605,976 59,114 66,670 890,326 (25 ) (10 ) (68 ) (25 ) (1 ) (129 )
- cash and balances at central banks 6,531 49,542 167,889 18,174 723 242,859 - - - - - -
- Hong Kong Government certificates of indebtedness - - - - 44,063 44,063 - - - - - -
- reverse repurchase agreements - non-trading 5,931 24,847 259,919 6,354 1,341 298,392 - - - - - -
- financial investments 38,438 23,602 74,491 28,344 17,226 182,101 (2 ) (1 ) (4 ) (5 ) - (12 )
- assets held for sale(2) - 14 3,229 864 8 4,115 - - (18 ) (9 ) - (27 )
- other assets(3) 6,328 3,333 100,448 5,378 3,309 118,796 (23 ) (9 ) (46 ) (11 ) (1 ) (90 )
Total on-balance sheet 296,532 410,177 991,998 227,401 71,778 1,997,886 (3,903 ) (2,008 ) (3,242 ) (1,637 ) (38 ) (10,828 )
Loan and other credit-related commitments 106,246 100,162 358,554 125,138 692 690,792 (26 ) (91 ) (195 ) (3 ) - (315 )
Financial guarantees 588 1,061 14,118 1,709 - 17,476 (1 ) (16 ) (33 ) (1 ) - (51 )
Total off-balance sheet(4) 106,834 101,223 372,672 126,847 692 708,268 (27 ) (107 ) (228 ) (4 ) - (366 )
At 31 Dec 2025 403,366 511,400 1,364,670 354,248 72,470 2,706,154 (3,930 ) (2,115 ) (3,470 ) (1,641 ) (38 ) (11,194 )
Fair value Memorandum allowance for ECL(5)
Hong Kong UK CIB IWPB Corporate Total Hong Kong UK CIB IWPB Corporate Total
Centre Centre
$m $m $m $m $m $m $m $m $m $m $m $m
Debt instruments measured at FVOCI 130,998 27,795 174,611 48,939 1,225 383,568 (1 ) - (20 ) (9 ) - (30 )
1 The total ECL is recognised in the loss allowance for the financial asset
unless the total ECL exceeds the gross carrying amount of the financial asset,
in which case the ECL is recognised as a provision.
2 At 31 March 2026, the gross carrying amount comprised $6.6bn of loans and
advances to customers and banks (31 December 2025: $3.6bn) and $2.3bn of other
financial assets at amortised cost (31 December 2025: $0.5bn). This included
the planned sales of our business in Malta ($4.1bn, 31 December 2025: Nil),
our custody business in Germany ($0.3bn, 31 December 2025: $0.3bn), our
business in Uruguay ($1.4bn, 31 December 2025: $1.4bn) and completion of the
sale of our business in South Africa (Nil, 31 December 2025: $0.4bn). The
corresponding allowance for ECL comprised $59m of loans and advances to
customers and banks (31 December 2025: $27m).
3 Includes only those financial instruments that are subject to the impairment
requirements of IFRS 9. 'Other assets' as presented within the summary
consolidated balance sheet on page 12 comprises both financial and
non-financial assets, including cash collateral and settlement accounts.
4 Represents the maximum amount at risk should the contracts be fully drawn
upon and clients default.
5 Debt instruments measured at FVOCI continue to be measured at fair value
with the allowance for ECL as a memorandum item. Change in ECL is recognised
in 'Change in expected credit losses and other credit impairment charges' in
the income statement.
Change in expected credit losses and other credit impairment charges by
business segment
Hong UK CIB IWPB Corporate Total
Kong Centre
$m $m $m $m $m $m
Quarter ended 31 Mar 2026 (208 ) (203 ) (679 ) (210 ) (1 ) (1,301 )
Quarter ended 31 Dec 2025 (307 ) (101 ) (235 ) (235 ) (23 ) (901 )
Quarter ended 31 Mar 2025 (316 ) (169 ) (173 ) (227 ) 9 (876 )
Summary of credit risk (excluding debt instruments measured at FVOCI) by stage
distribution and ECL coverage at 31 March 2026
Gross carrying/nominal amount(1) Allowance for ECL ECL coverage %
Stage 1 Stage 2 Stage 3 POCI(2) Total Stage 1 Stage 2 Stage 3 POCI(2) Total Stage 1 Stage 2 Stage 3 POCI(2) Total
$m $m $m $m $m $m $m $m $m $m % % % % %
Loans and advances to customers at amortised cost(3) 900,958 87,651 24,343 344 1,013,296 (1,258 ) (2,320 ) (7,690 ) (71 ) (11,339 ) 0.1 2.6 31.6 20.6 1.1
Loans and advances to banks at amortised cost 99,240 1,068 1 - 100,309 (9 ) (2 ) (1 ) - (12 ) - 0.2 100.0 - -
Other financial assets measured at amortised cost 916,849 1,899 327 3 919,078 (85 ) (17 ) (55 ) - (157 ) - 0.9 16.8 - -
Loan and other credit-related commit-ments 722,352 19,198 773 4 742,327 (167 ) (114 ) (95 ) - (376 ) - 0.6 12.3 - 0.1
Financial guarantees 16,588 1,533 208 - 18,329 (9 ) (16 ) (52 ) - (77 ) 0.1 1.0 25.0 - 0.4
At 31 Mar 2026 2,655,987 111,349 25,652 351 2,793,339 (1,528 ) (2,469 ) (7,893 ) (71 ) (11,961 ) 0.1 2.2 30.8 20.2 0.4
Summary of credit risk (excluding debt instruments measured at FVOCI) by stage
distribution and ECL coverage at 31 December 2025
Gross carrying/nominal amount(1) Allowance for ECL ECL coverage %
Stage 1 Stage 2 Stage 3 POCI(2) Total Stage 1 Stage 2 Stage 3 POCI(2) Total Stage 1 Stage 2 Stage 3 POCI(2) Total
$m $m $m $m $m $m $m $m $m $m % % % % %
Loans and advances to customers at amortised cost 893,433 80,936 24,389 333 999,091 (1,201 ) (2,318 ) (7,097 ) (76 ) (10,692 ) 0.1 2.9 29.1 22.8 1.1
Loans and advances to banks at amortised cost 108,336 132 1 - 108,469 (4 ) (2 ) (1 ) - (7 ) - 1.5 100.0 - -
Other financial assets measured at amortised cost 888,491 1,651 184 - 890,326 (76 ) (11 ) (42 ) - (129 ) - 0.7 22.8 - -
Loan and other credit-related commit-ments 669,648 20,488 652 4 690,792 (149 ) (97 ) (69 ) - (315 ) - 0.5 10.6 - -
Financial guarantees 15,913 1,371 192 - 17,476 (8 ) (17 ) (26 ) - (51 ) 0.1 1.2 13.5 - 0.3
At 31 Dec 2025 2,575,821 104,578 25,418 337 2,706,154 (1,438 ) (2,445 ) (7,235 ) (76 ) (11,194 ) 0.1 2.3 28.5 22.6 0.4
1 Represents the maximum amount at risk should the contracts be fully drawn
upon and clients default.
2 Purchased or originated credit-impaired financial assets ('POCI').
3 Stage 2 balances increased in both Personal and Wholesale lending following
introduction of the Downside 1 scenario during the reporting period and due to
changes in the underlying portfolio.
Measurement uncertainty and sensitivity analysis of ECL estimates
The recognition and measurement of ECL involves the use of significant
judgement and estimation. We form multiple scenarios based on economic
forecasts and distributional estimates and apply these to credit risk models
to estimate future credit losses. The results are then probability-weighted to
determine an unbiased ECL estimate.
Management assessed the current economic environment, reviewed the latest
economic forecasts and market indicators and discussed key risks and
uncertainties before selecting the economic scenarios and their probability
weightings.
Economic forecasts were subject to a high degree of uncertainty as of 31 March
2026 due to the conflict in the Middle East that began on 28 February 2026.
Management judgemental adjustments are used where modelled allowance for ECL
does not fully reflect the identified risks and related uncertainty, or to
capture significant late-breaking events.
Methodology
At 31 March 2026, five economic scenarios were used to calculate ECL. These
scenarios were selected to capture the latest economic expectations and to
articulate management's view of the range of risks and potential outcomes. In
most economic circumstances, four standard scenarios are refreshed each
quarter. In the first quarter of 2026, a fifth scenario was added to address
the heightened risk and uncertainty arising from the conflict in the Middle
East.
Of those four standard scenarios, the Upside, Central and Downside are drawn
from external consensus forecasts, market data and probability distributions
that represent a range of potential economic outcomes. The fourth scenario,
the Downside 2, represents management's view of severe downside risks in the
tail of the distribution. These standard scenarios are calibrated as global
demand shocks, where a downturn in economic activity drives a fall in
inflation and a reduction in central bank interest rates.
A fifth scenario, the Downside 1, was developed to capture the supply-driven
shock to energy supply and regional logistics stemming from the Middle East
conflict that began on 28 February 2026. It incorporates a sharp increase in
oil prices, leading to higher inflation and a tightening of global financial
conditions. It results in weaker growth in our major markets, with the Middle
East particularly adversely affected.
Scenarios are refreshed and updated with the latest economic forecasts and
distributional estimates every quarter.
Description of economic scenarios
The consensus Central scenario reflects a baseline expectation that was formed
before the conflict in the Middle East that began on 28 February 2026. It
assumes that global growth slows modestly from 2025 into 2026 as trade growth
eases following the surge in volumes that accompanied the imposition of higher
US tariffs last year.
For the US, growth is expected to be supported by tax cuts, investment in the
roll out and development of AI and the expectation of continued monetary
policy easing. Growth is forecast to slow in the UK due to higher unemployment
and weak consumer spending, while in France it is expected to remain broadly
unchanged. For mainland China and Hong Kong, growth is also forecast to slow
in 2026 relative to 2025. The key driver of the outlook in both markets
relates to trade. Hong Kong benefited significantly from the redirection of
Chinese exports in 2025, but the contribution to growth is expected to be
smaller in the year ahead. GDP growth is still forecast to remain close to its
trend rate however, as the housing market is expected to continue its recovery
and domestic consumption spending is expected to rise. The Central scenario
for mainland China is within the range of the official government target. It
assumes a modest slowdown relative to 2025 as trade growth decelerates and
authorities continue to pursue supply side reforms.
Although the Central scenario was finalised before the conflict started, it
was considered to remain a relevant baseline at the reporting date. This
assessment was based on information available at quarter end, including the
latest external economic forecasts, financial market indicators and official
communications around likely conflict duration. A key consideration was that
for our major markets outside of the Middle East, updated economic forecasts
remained closer to the pre-war consensus than the implied paths of the
downside scenarios. At the same time, while financial market implied interest
rate expectations were extremely volatile, a majority of economists considered
that major central banks would be able to look past a temporary, oil-driven,
spike in inflation.
Nonetheless, the conflict has increased forecast uncertainty and this was
reflected by assigning a lower than usual weighting of 50% to the Central
scenario, with the remainder allocated to the more severe outcomes. Risks to
the baseline outlook are captured in outer scenarios.
The three standard outer scenarios, comprising an Upside and two Downsides,
are configured around tariff and other risks, which drive demand-side shocks
for most markets. In those scenarios, GDP and inflation move together
directionally and in the downside scenarios they fall. To capture the risks
attached to the Middle East conflict a fifth scenario was deployed, which is
configured as a supply shock. In this scenario, disruption to the
transportation of oil, gas and other critical materials from the region drives
a rise in commodity prices that increases inflation, even as GDP growth is
slowing and unemployment is increasing.
The five global scenarios used for calculating ECL at 31 March 2026 were:
- The consensus Central scenario: This scenario was formed
before the conflict that began on 28 February 2026, and assumes moderate rates
of growth through 2026. The scenario is consistent with a US tariff rate,
measured as an effective trade-weighted average, of 14%, compared with 15% at
the end of 2025. Although growth in trade is forecast to slow, the scenario
assumes that GDP growth in most of our main markets benefits from continued
policy support in the form of the gradual lowering of policy interest rates
and deficit-financed fiscal spending. In addition, after rising through 2025
unemployment is forecast to stabilise, albeit at the higher level. The US
Federal Reserve and the BoE are expected to continue to loosen monetary
policy, while the European Central Bank is expected to keep interest rates on
hold.
- The consensus Upside scenario: This scenario features faster
growth in economic activity in the near term compared with the consensus
Central scenario. In this scenario, trade and geopolitical tensions ease and
the improvement in confidence drives an acceleration in GDP growth.
Unemployment also falls and equity markets and house prices see accelerated
gains.
- The consensus Downside scenario: This scenario features
weaker economic activity compared with the Central scenario. For most markets,
it incorporates a mild to moderate recession, driven by an escalation in
tariffs and the crystallisation of other risks. In this scenario, growth
weakens, unemployment rises and equity markets and house prices contract.
- The Downside 1 scenario: This scenario explores the risks
associated with the conflict in the Middle East that began on 28 February 2026
and is calibrated as a supply shock in which the conflict persists into the
second quarter of 2026, with recovery over subsequent quarters. In the
scenario, GDP falls, and inflation and policy interest rates rise. The
scenario features a period of disruption to shipping through the Strait of
Hormuz and damage to regional oil and gas infrastructure. The price of Brent
crude oil rises to $130/bbl through the second quarter of 2026 and remains at
over $100/bbl in the third, before falling back below $100/bbl by year end.
The severity of the scenario varies significantly by market and is designed to
reflect the exposure and sensitivity of each market both to the conflict and
to higher energy costs. For most markets, the expected impact is a moderate
slowdown in growth below the Central scenario, but it also features a
significant rise in inflation above the Central scenario that prompts major
central banks to raise interest rates. The most severe impact is seen in the
Middle East, where many markets are assumed to enter recession.
- The Downside 2 scenario: This scenario reflects management's
view of the tail end of the economic distribution. It incorporates the
simultaneous crystallisation of a number of risks that leads to a deep global
recession. The subsequent drop in demand leads to a steep fall in commodity
prices, and a rapid increase in unemployment. The narrative features an
escalation in tariff actions and retaliation globally and further
intensification of geopolitical crises. The scenario is consistent with the US
tariff rate, measured as an effective trade-weighted average, rising to 25% at
the end of 2026.
The following tables describe key macroeconomic variables in the consensus
Central scenario, consensus Upside, consensus Downside, Downside 1 and
Downside 2 scenarios.
Consensus Central scenario 2Q26-1Q31 (as at 1Q26)
UK US Hong Mainland China France UAE Mexico
Kong
GDP (annual average growth rate, %)
2026 1.1 2.5 2.5 4.5 1.0 4.8 1.3
2027 1.4 2.0 2.4 4.4 1.1 4.0 1.9
2028 1.4 2.0 2.3 4.2 1.2 3.9 2.1
2029 1.4 2.0 2.2 4.1 1.2 3.7 2.2
2030 1.5 2.0 2.2 4.0 1.2 3.5 2.2
5-year average(1) 1.4 2.1 2.3 4.2 1.2 3.8 2.0
Unemployment rate (%)
2026 5.1 4.5 3.5 5.2 7.7 2.3 2.8
2027 5.0 4.3 3.4 5.2 7.6 2.2 3.1
2028 4.9 4.2 3.1 5.1 7.4 2.1 3.1
2029 4.8 4.2 3.0 5.0 7.4 2.1 3.1
2030 4.7 4.1 3.0 5.0 7.3 2.0 3.1
5-year average(1) 4.9 4.2 3.2 5.1 7.5 2.1 3.0
House prices (annual average growth rate, %)
2026 2.0 1.5 5.2 (3.2 ) 3.5 6.3 5.8
2027 2.2 1.8 2.7 1.0 5.3 3.2 4.5
2028 3.1 2.5 3.1 3.1 4.2 2.3 4.4
2029 2.7 2.9 2.7 3.4 3.2 2.0 4.3
2030 2.4 3.0 2.3 2.3 2.3 2.1 4.2
5-year average(1) 2.5 2.4 3.1 1.6 3.7 2.9 4.4
Inflation (annual average growth rate, %)
2026 2.5 2.7 1.7 0.7 1.2 1.9 3.7
2027 2.2 2.4 1.8 1.0 1.6 1.8 3.6
2028 2.1 2.2 1.9 1.4 2.0 1.9 3.4
2029 2.1 2.2 2.1 1.5 2.1 1.9 3.4
2030 2.0 2.1 2.2 1.5 2.0 1.9 3.4
5-year average(1) 2.1 2.3 2.0 1.2 1.8 1.9 3.5
Central bank policy rate (annual average, %)(2)
2026 3.6 3.5 3.9 3.0 2.1 3.5 6.9
2027 3.6 3.1 3.5 3.0 2.2 3.2 7.2
2028 3.7 3.1 3.5 3.0 2.4 3.2 7.6
2029 3.8 3.3 3.7 3.2 2.5 3.3 8.0
2030 3.9 3.4 3.8 3.3 2.6 3.5 8.2
5-year average(1) 3.7 3.3 3.7 3.1 2.4 3.3 7.7
1 The five-year average is calculated over a projected period of 20 quarters
from 2Q26 to 1Q31.
2 For mainland China, the policy rate shown is the Loan Prime Rate.
Consensus Central scenario 2026-2030 (as at 4Q25)
UK US Hong Mainland China France UAE Mexico
Kong
GDP (annual average growth rate, %)
2026 1.1 1.9 2.3 4.4 0.9 4.7 1.3
2027 1.4 2.0 2.3 4.2 1.2 4.1 2.0
2028 1.5 2.1 2.3 4.0 1.3 3.8 2.2
2029 1.5 2.1 2.4 3.8 1.3 3.5 2.2
2030 1.5 2.0 2.4 3.8 1.3 3.5 2.2
5-year average(1) 1.4 2.0 2.3 4.0 1.2 3.9 2.0
Unemployment rate (%)
2026 4.9 4.4 3.6 5.2 7.6 2.5 3.2
2027 4.7 4.3 3.4 5.2 7.6 2.4 3.2
2028 4.7 4.1 3.1 5.1 7.5 2.4 3.2
2029 4.7 4.1 3.0 5.0 7.4 2.4 3.1
2030 4.7 4.1 3.0 5.0 7.4 2.4 3.1
5-year average(1) 4.7 4.2 3.2 5.1 7.5 2.4 3.2
House prices (annual average growth rate, %)
2026 1.2 1.1 0.5 (1.6 ) 4.3 5.8 4.8
2027 2.8 1.9 1.5 2.1 5.0 3.2 4.5
2028 3.3 2.7 2.5 3.5 4.1 2.3 4.4
2029 2.7 3.2 2.1 3.4 3.1 2.0 4.3
2030 2.4 3.2 2.1 2.3 2.2 2.1 4.2
5-year average(1) 2.5 2.4 1.8 1.9 3.7 3.1 4.4
Inflation (annual average growth rate, %)
2026 2.5 2.9 1.8 0.7 1.4 2.0 3.7
2027 2.1 2.3 1.9 1.2 1.7 1.9 3.6
2028 2.1 2.2 2.0 1.4 2.1 1.9 3.5
2029 2.0 2.2 2.2 1.5 2.1 2.0 3.4
2030 2.0 2.2 2.2 1.5 1.9 2.0 3.4
5-year average(1) 2.2 2.4 2.0 1.3 1.9 1.9 3.5
Central bank policy rate (annual average, %)(2)
2026 3.5 3.4 3.8 3.0 1.9 3.5 7.0
2027 3.4 3.1 3.5 3.0 2.0 3.1 7.2
2028 3.5 3.2 3.6 3.1 2.1 3.3 7.5
2029 3.7 3.4 3.8 3.1 2.3 3.4 7.7
2030 3.8 3.6 3.9 3.2 2.5 3.6 7.9
5-year average(1) 3.6 3.3 3.7 3.1 2.2 3.4 7.5
1 The five-year average is calculated over a 20-quarter period from 2Q26 to
1Q31.
2 For mainland China, the policy rate shown is the Loan Prime Rate.
Consensus Upside scenario 2Q26-1Q31 (as at 1Q26)
UK US Hong Mainland China France UAE Mexico
Kong
GDP level (%, start-to-peak)(1) 10.8 (1Q31) 15.1 (1Q31) 19.0 (1Q31) 29.5 (1Q31) 8.3 (1Q31) 28.4 (1Q31) 16.5 (1Q31)
Unemployment rate (%, min)(2) 3.5 (1Q28) 3.6 (1Q28) 2.9 (3Q28) 4.7 (1Q28) 6.8 (1Q28) 1.8 (1Q28) 2.4 (4Q26)
House price index (%, start-to-peak)(1) 18.9 (1Q31) 22.6 (1Q31) 24.6 (4Q30) 13.3 (1Q31) 22.0 (1Q31) 21.1 (1Q31) 29.3 (1Q31)
Inflation rate (YoY % change, max)(3) 3.3 (2Q27) 3.6 (4Q26) 2.7 (1Q27) 1.5 (4Q29) 2.3 (4Q28) 2.5 (2Q26) 4.0 (1Q27)
Central bank policy rate (%, max)(3) 4.0 (1Q31) 3.7 (2Q26) 4.1 (2Q26) 3.4 (2Q27) 2.7 (1Q27) 3.7 (2Q26) 8.4 (1Q31)
Consensus Upside scenario 2026-2030 (as at 4Q25)
UK US Hong Mainland France UAE Mexico
Kong China
GDP level (%, start-to-peak)(1) 11.0 (4Q30) 15.2 (4Q30) 20.7 (4Q30) 28.6 (4Q30) 8.5 (4Q30) 29.0 (4Q30) 16.9 (4Q30)
Unemployment rate (%, min)(2) 3.2 (4Q27) 3.5 (4Q27) 2.8 (2Q28) 4.7 (4Q27) 6.6 (4Q27) 2.0 (4Q27) 2.8 (3Q26)
House price index (%, start-to-peak)(1) 20.0 (4Q30) 23.2 (4Q30) 19.4 (4Q30) 14.9 (4Q30) 22.6 (4Q30) 22.2 (4Q30) 29.5 (4Q30)
Inflation rate (YoY % change, max)(3) 3.5 (1Q26) 3.6 (3Q26) 2.9 (2Q26) 1.5 (4Q30) 2.4 (4Q27) 3.1 (2Q26) 4.2 (1Q26)
Central bank policy rate (%, max)(3) 3.9 (1Q26) 3.9 (1Q26) 4.2 (1Q26) 3.4 (1Q27) 2.5 (4Q30) 3.9 (1Q26) 8.1 (4Q30)
1 Cumulative change from the start of the scenario to the highest level
observed over the 20‑quarter projection.
2 Lowest projected unemployment in the scenario.
3 The table shows the highest projected policy rate and year-on-year
percentage change in inflation in the scenario. For mainland China, the policy
rate shown is the Loan Prime Rate.
Consensus Downside scenario 2Q26-1Q31 (as at 1Q26)
UK US Hong Mainland China France UAE Mexico
Kong
GDP level (%, start-to-trough)(1) (0.4 ) (2Q28) (0.6 ) (4Q26) (2.5 ) (3Q27) (1.7 ) (4Q26) (0.2 ) (3Q26) 0.1 (2Q26) (1.3 ) (1Q27)
Unemployment rate (%, max)(2) 6.4 (1Q27) 5.3 (4Q26) 4.7 (2Q27) 6.8 (1Q28) 8.4 (2Q27) 2.9 (4Q27) 3.5 (1Q27)
House price index (%, start-to-trough)(1) (4.2 ) (1Q27) (2.8 ) (2Q27) (1.5 ) (2Q27) (6.1 ) (2Q27) 0.7 (2Q26) (3.6 ) (3Q26) 0.5 (2Q26)
Inflation rate (YoY % change)(3) 1.0 (1Q27) 3.1 (2Q26) 0.8 (1Q27) (2.6 ) (4Q26) 0.6 (3Q26) 0.6 (1Q27) 4.5 (3Q26)
Central bank policy rate (%)(3) 2.4 (1Q29) 3.5 (1Q31) 3.9 (1Q31) 1.5 (1Q27) 0.9 (4Q26) 3.6 (1Q31) 9.4 (3Q26)
Consensus Downside scenario 2026-2030 (as at 4Q25)
UK US Hong Mainland France UAE Mexico
Kong China
GDP level (%, start-to-trough)(1) (0.2 ) (2Q27) (0.8 ) (3Q26) (1.7 ) (4Q27) (1.7 ) (3Q26) (0.4 ) (3Q26) 0.4 (1Q26) (1.0 ) (1Q27)
Unemployment rate (%, max)(2) 6.2 (4Q26) 5.3 (3Q26) 4.8 (4Q26) 6.8 (4Q27) 8.6 (3Q26) 3.2 (3Q27) 3.8 (3Q26)
House price index (%, start-to-trough)(1) (4.1 ) (1Q27) (3.1 ) (1Q27) (3.8 ) (1Q27) (5.6 ) (1Q27) 0.7 (1Q26) (3.4 ) (2Q26) 0.6 (1Q26)
Inflation rate (YoY % change)(3) 1.3 (3Q26) 3.4 (1Q26) 0.1 (4Q26) (2.9 ) (4Q26) 0.4 (4Q26) 0.5 (4Q26) 4.7 (1Q26)
Central bank policy rate (%)(3) 2.2 (3Q28) 4.6 (2Q26) 5.0 (2Q26) 1.5 (4Q26) 0.6 (1Q27) 4.6 (2Q26) 9.5 (2Q26)
1 Cumulative change from the start of the scenario to the lowest level
observed over the 20‑quarter projection. If the projected series does not
fall below its starting level, the value reported is the smallest positive
cumulative change over the projection horizon.
2 The highest projected unemployment in the scenario.
3 The table shows the peak year-on-year percentage change in inflation and
peak projected policy rates for the US and Mexico. For all other countries and
territories, the trough is reported. For the UAE and Hong Kong, the policy
rate is also shown as its peak, reflecting their US dollar-linked exchange
rate regimes. For mainland China, the policy rate shown is the Loan Prime
Rate.
Downside 1 scenario 2Q26-1Q31 (as at 1Q26)
UK US Hong Mainland China France UAE Mexico
Kong
GDP (annual average growth rate, %)
2026 0.6 2.0 2.0 3.6 0.6 2.9 1.3
2027 0.7 1.3 1.7 3.1 0.6 1.3 1.4
2028 1.4 1.9 2.3 4.1 1.2 3.3 2.0
2029 1.4 2.0 2.2 4.1 1.2 3.7 2.2
2030 1.5 2.0 2.2 4.0 1.2 3.5 2.2
5-year average(1) 1.1 1.8 2.0 3.7 1.0 2.8 1.8
Unemployment rate (%)
2026 5.3 4.8 4.1 5.3 8.1 2.8 3.1
2027 5.6 4.8 3.8 5.8 8.4 3.1 3.3
2028 5.3 4.5 3.1 5.8 8.0 2.7 3.1
2029 4.8 4.2 3.0 5.1 7.3 2.3 3.1
2030 4.7 4.1 3.0 5.0 7.2 2.2 3.1
5-year average(1) 5.1 4.4 3.4 5.4 7.8 2.6 3.1
House prices (annual average growth rate, %)
2026 (1.3 ) (0.3 ) 4.7 (3.7 ) 2.0 0.7 5.7
2027 (5.4 ) (2.0 ) 1.9 (1.2 ) 2.7 (5.7 ) 3.8
2028 3.1 2.6 3.1 2.8 4.2 4.4 3.8
2029 4.0 4.0 2.7 3.4 3.2 3.2 4.1
2030 3.4 4.1 2.3 2.3 2.3 2.1 4.2
5-year average(1) 0.9 1.8 2.8 1.1 2.9 0.6 4.1
Inflation (annual average growth rate, %)
2026 3.9 3.4 1.8 0.8 2.1 2.1 4.9
2027 3.2 2.8 2.0 1.2 2.2 1.3 3.9
2028 2.1 2.2 1.9 1.4 2.0 1.4 2.4
2029 2.1 2.2 2.1 1.5 2.1 1.5 2.5
2030 2.0 2.1 2.2 1.5 2.0 2.0 2.6
5-year average(1) 2.6 2.5 2.1 1.3 2.1 1.7 3.2
Central bank policy rate (annual average, %)(2)
2026 4.0 3.9 4.3 2.8 2.2 3.9 9.3
2027 3.7 3.6 3.9 2.7 2.3 3.6 7.7
2028 3.7 3.4 3.8 2.7 2.4 3.5 5.5
2029 3.8 3.5 3.9 2.7 2.5 3.5 8.1
2030 3.9 3.5 3.9 2.7 2.6 3.5 8.2
5-year average(1) 3.8 3.6 3.9 2.7 2.4 3.6 7.8
1 The five-year average is calculated over a 20-quarter period from 2Q26 to
1Q31.
2 For mainland China, the policy rate shown is the Loan Prime Rate.
Downside 2 scenario 2Q26-1Q31 (as at 1Q26)
UK US Hong Mainland China France UAE Mexico
Kong
GDP level (%, start-to-trough)(1) (5.4 ) (3Q27) (4.3 ) (2Q27) (10.2 ) (3Q27) (6.1 ) (2Q27) (6.2 ) (3Q27) (6.0 ) (3Q27) (9.9 ) (3Q27)
Unemployment rate (%, max)(2) 9.0 (3Q27) 9.3 (1Q28) 6.9 (1Q27) 7.0 (1Q28) 10.7 (2Q28) 3.6 (4Q26) 5.1 (3Q27)
House price index (%, start-to-trough)(1) (24.1 ) (1Q28) (16.7 ) (1Q27) (14.7 ) (2Q29) (24.0 ) (1Q28) (6.1 ) (4Q27) (32.6 ) (2Q28) 0.5 (2Q26)
Inflation rate (YoY % change)(3) (2.1 ) (1Q27) 3.7 (3Q26) (1.8 ) (3Q27) (6.1 ) (1Q27) (0.3 ) (1Q27) 0.4 (1Q27) 4.7 (3Q26)
Central bank policy rate (%)(3) 1.6 (2Q27) 3.1 (2Q26) 3.5 (2Q26) 1.2 (3Q27) 0.4 (4Q26) 3.1 (2Q26) 9.8 (3Q26)
Downside 2 scenario 2026-2030 (as at 4Q25)
UK US Hong Mainland France UAE Mexico
Kong China
GDP level (%, start-to-trough)(1) (5.3 ) (2Q27) (4.5 ) (1Q27) (9.3 ) (3Q27) (6.0 ) (1Q27) (6.2 ) (2Q27) (5.7 ) (2Q27) (10.0 ) (1Q27)
Unemployment rate (%, max)(2) 8.9 (2Q27) 9.0 (1Q28) 7.0 (4Q26) 7.0 (4Q27) 10.7 (4Q27) 3.9 (3Q26) 5.2 (2Q27)
House price index (%, start-to-trough)(1) (24.2 ) (4Q27) (17.1 ) (4Q26) (19.6 ) (2Q29) (23.1 ) (4Q27) (5.9 ) (3Q27) (30.5 ) (1Q28) 0.6 (1Q26)
Inflation rate (YoY % change)(3) (1.9 ) (4Q26) 4.1 (2Q26) (1.7 ) (2Q27) (6.5 ) (4Q26) (0.6 ) (4Q26) 0.3 (4Q26) 4.8 (1Q26)
Central bank policy rate (%)(3) 1.4 (1Q27) 4.7 (2Q26) 5.0 (2Q26) 1.2 (2Q27) 0.1 (4Q26) 4.7 (2Q26) 9.9 (2Q26)
1 Cumulative change from the start of the scenario to the lowest level
observed over the 20‑quarter projection. If the projected series does not
fall below its starting level, the value reported is the smallest positive
cumulative change over the projection horizon.
2 The highest projected unemployment in the scenario.
3 The table shows the peak year-on-year percentage change in inflation and
peak projected policy rates for the US and Mexico, and the trough for all
other countries and territories. For the UAE and Hong Kong, the policy rate is
also shown as its peak, reflecting their US dollar-linked exchange rate
regimes. For mainland China, the policy rate shown is the Loan Prime Rate.
The following table describes the probabilities assigned in each scenario.
Scenario weightings, %
Standard weights UK US Hong Kong Mainland China France UAE Mexico
1Q26
Consensus Upside 10 5 5 5 5 5 5 5
Consensus Central 75 50 50 50 50 50 50 50
Consensus Downside 10 10 10 10 10 10 10 10
Downside 1 - 30 30 30 30 30 30 30
Downside 2 5 5 5 5 5 5 5 5
4Q25
Consensus Upside 10 10 10 10 10 10 10 10
Consensus Central 75 75 75 75 75 75 75 75
Consensus Downside 10 10 10 10 10 10 10 10
Downside 2 5 5 5 5 5 5 5 5
Scenario weightings for the standard outer scenarios are calibrated to
probabilities that are determined with reference to consensus forecast
probability distributions. Management may then choose to vary weights if they
assess that the calibration lags more recent events, or does not reflect their
view of the distribution of economic risk. Management's view of the scenarios
and the probability distribution takes into consideration the relationship of
the consensus scenario to both internal and external assessments of risk.
At 31 March 2026, management concluded that the conflict in the Middle East
had materially increased uncertainty around the outlook and risk distribution,
particularly for energy prices, inflation and monetary policy. The
introduction of a fifth scenario offered scope to reassign weight from the
Central and Upside to a scenario that appropriately reflects near-term risks.
Weights were therefore adjusted away from the standard calibration to address
elevated forecast uncertainty and an assessment that the balance of risk had
skewed more significantly to the downside. The re-weighting of scenarios was
applied on a global basis. The fifth scenario incorporates region-specific
variations to reflect differing impacts of the Middle East conflict, which
allows for a uniform adjustment to scenario weights across all jurisdictions.
The consensus Upside and Central scenarios for all key markets were assigned a
combined weighting of 55%. The Downside 1 scenario, which addresses the
escalating economic risks associated with the Middle East conflict that began
on 28 February 2026, was assigned a 30% weighting. The remaining 15% was
assigned to the two other Downside scenarios, with the consensus Downside
scenario given a weight of 10% and 5% assigned to the Downside 2.
Management used the consensus and additional scenarios with their respective
weightings, together with management judgemental adjustments, to ensure total
reported ECL allowance was reflective of expected credit losses at the
reporting date.
Management judgemental adjustments
In the context of IFRS 9, management judgemental adjustments are typically
short-term increases or decreases to the modelled allowance for ECL at either
a customer, segment or portfolio level where management believes allowances do
not sufficiently reflect the credit risk/expected credit losses at the
reporting date. These can relate to risks or uncertainties that are not
reflected in the models and/or to any late-breaking events with significant
uncertainty, subject to management review and challenge. The drivers of
management judgemental adjustments continue to evolve with the economic
environment and as new risks emerge. Further details can be found in the
section 'Management judgemental adjustments' on page 121 of the Annual Report
and Accounts 2025.
Management judgemental adjustments are reviewed under the governance process
for IFRS 9, as detailed in the section 'Credit risk management' on page 107 of
the Annual Report and Accounts 2025.
At 31 March 2026, total management judgemental adjustments for retail and
wholesale loans increased the allowance for ECL by $0.2bn (31 December 2025:
$0.2bn increase). The wholesale portfolio management judgemental adjustments
increased by $0.1bn from 31 December 2025, driven primarily by uncertainty
from the conflict in the Middle East that began on 28 February 2026, as well
as market-specific uncertainties across a number of geographies. For the
retail portfolios, management judgemental adjustments increased the ECL
allowances by $0.1bn. Market-specific uncertainties in relation to the Middle
East conflict were captured through management judgemental adjustments. The
adjustments reflect where the increase in risk was not fully captured by
modelled outcomes, particularly for geographies with localised impacts, such
as the UAE. In addition, through continuous monitoring of the macroeconomic
environment and modelled ECL, there were no other significant management
judgemental adjustments applied to the retail portfolio at 31 March 2026.
Economic scenarios sensitivity analysis of ECL estimates
Management considered the sensitivity of the ECL outcome against the economic
forecasts as part of the ECL governance process by recalculating the ECL under
each scenario described above for selected portfolios, applying a 100%
weighting to each scenario in turn. The weighting is reflected in both the
determination of a significant increase in credit risk and the measurement of
the resulting ECL.
The allowance for ECL calculated for the Upside and Downside scenarios should
not be taken to represent the upper and lower limits of possible ECL outcomes.
The impact of defaults that might occur in the future under different economic
scenarios is captured by recalculating ECL for loans at the balance sheet
date.
There is a particularly high degree of estimation uncertainty in numbers
representing more severe risk scenarios when assigned a 100% weighting.
For wholesale credit risk exposures, the sensitivity analysis excludes
allowance for ECL and financial instruments related to defaulted (stage 3)
obligors. Loans to defaulted obligors are a small portion of the overall
wholesale lending exposure, even if representing the majority of the allowance
for ECL. The measurement of stage 3 ECL is relatively more sensitive to credit
factors specific to the obligor than future economic scenarios, and therefore
the effects of macroeconomic factors are not necessarily the key consideration
when performing individual assessments of allowances for obligors in default.
Due to the range and specificity of the credit factors to which the ECL is
sensitive, it is not possible to provide a meaningful alternative sensitivity
analysis for a consistent set of risks across all defaulted obligors.
For retail credit risk exposures, the sensitivity analysis includes ECL
allowance for loans and advances to customers related to defaulted obligors.
This is because the retail ECL allowance for secured mortgage portfolios,
including loans in all stages, is sensitive to macroeconomic variables.
Group ECL sensitivity results
The allowance for ECL of the scenarios and management judgemental adjustments
is highly sensitive to movements in economic forecasts. If the Group allowance
for ECL balance was estimated solely on the basis of the consensus Upside,
consensus Central, consensus Downside, Downside 1 and the Downside 2 scenarios
at 31 March 2026, it would increase/(decrease) as presented in the below
table.
Retail Wholesale(1)
Total Group ECL at 31 Mar 2026(2) $bn $bn
Reported ECL 2.7 2.0
Scenarios
100% consensus Central scenario (0.1 ) (0.3 )
100% consensus Upside scenario (0.1 ) (0.7 )
100% consensus Downside scenario 0.0 0.3
100% Downside 1 scenario 0.0 0.2
100% Downside 2 scenario 0.9 2.5
Total Group ECL at 31 Dec 2025(2)
Reported ECL 2.7 1.9
Scenarios
100% consensus Central scenario (0.0 ) 0.0
100% consensus Upside scenario (0.1 ) (0.3 )
100% consensus Downside scenario 0.0 0.6
100% Downside 2 scenario 0.9 2.7
1 Includes low credit-risk financial instruments, such as debt instruments at
FVOCI, which have high carrying values but low ECL under all the scenarios.
2 ECL sensitivities exclude portfolios utilising less complex modelling
approaches for the retail portfolio and defaulted obligors for the wholesale
portfolio.
At 31 March 2026, the Group reported ECL allowance remained stable in the
retail portfolio and increased by $0.1bn in the wholesale portfolio, compared
with 31 December 2025. The reported ECL allowance included the consideration
of the additional Downside 1 scenario, which was introduced in the reporting
period, and the 100% scenario ECL is presented above.
The Downside 1 scenario results incorporate more significant regional
differentiation than the consensus Downside, to reflect country level
sensitivities on their economies from the Middle East conflict.
In the retail portfolio, the allowances for ECL under each of the 100%
consensus scenarios and the Downside 2 scenario were consistent with 31
December 2025. The consensus Downside and Downside 1 scenario ECL allowances
were also at comparable levels and would both increase the reported ECL
allowance.
In the Wholesale portfolio there was a marginal improvement in the consensus
scenarios relative to 31 December 2025. The Downside 1 scenario added $0.2bn
to Wholesale ECL at 31 March 2026, which affected the sensitivity to other
scenarios, reducing the impact compared with 31 December 2025. There is less
sensitivity in the consensus Downside scenario at 31 March 2026 due to this
impact and the improvement in the scenarios in certain countries and
territories, including the relative improvement in scenarios in the US and
Hong Kong.
Personal lending
Total personal lending for loans and advances to customers at amortised cost
by stage distribution
Gross carrying amount Allowance for ECL
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
$m $m $m $m $m $m $m $m
By legal entity
HSBC UK Bank plc 190,482 15,109 1,212 206,803 (221 ) (315 ) (257 ) (793 )
HSBC Bank plc 15,208 947 349 16,504 (13 ) (10 ) (99 ) (122 )
The Hongkong and Shanghai Banking Corporation Limited 204,695 7,404 1,099 213,198 (206 ) (439 ) (169 ) (814 )
HSBC Bank Middle East Limited 3,882 313 51 4,246 (17 ) (42 ) (30 ) (89 )
HSBC North America Holdings Inc. 19,409 491 425 20,325 (4 ) (12 ) (15 ) (31 )
Grupo Financiero HSBC, S.A. de C.V. 11,411 1,125 807 13,343 (231 ) (395 ) (313 ) (939 )
Other trading entities 346 31 4 381 - (1 ) (3 ) (4 )
At 31 Mar 2026 445,433 25,420 3,947 474,800 (692 ) (1,214 ) (886 ) (2,792 )
By legal entity
HSBC UK Bank plc 191,726 14,515 1,200 207,441 (201 ) (315 ) (256 ) (772 )
HSBC Bank plc 17,416 1,076 365 18,857 (16 ) (14 ) (107 ) (137 )
The Hongkong and Shanghai Banking Corporation Limited 201,779 6,407 1,108 209,294 (199 ) (432 ) (170 ) (801 )
HSBC Bank Middle East Limited 4,061 134 47 4,242 (18 ) (23 ) (29 ) (70 )
HSBC North America Holdings Inc. 19,607 512 404 20,523 (4 ) (12 ) (14 ) (30 )
Grupo Financiero HSBC, S.A. de C.V. 11,705 1,212 817 13,734 (229 ) (438 ) (316 ) (983 )
Other trading entities 402 31 4 437 - (1 ) (3 ) (4 )
At 31 Dec 2025 446,696 23,887 3,945 474,528 (667 ) (1,235 ) (895 ) (2,797 )
Wholesale lending
Gross carrying amount Allowance for ECL
Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total
$m $m $m $m $m $m $m $m $m $m
By legal entity
HSBC UK Bank plc 97,697 13,137 3,210 - 114,044 (201 ) (330 ) (704 ) - (1,235 )
HSBC Bank plc 91,531 7,078 2,363 57 101,029 (55 ) (113 ) (1,014 ) (31 ) (1,213 )
The Hongkong and Shanghai Banking Corporation Limited 285,715 36,043 12,395 89 334,242 (192 ) (466 ) (3,877 ) (35 ) (4,570 )
HSBC Bank Middle East Limited 27,065 1,167 1,219 5 29,456 (37 ) (38 ) (663 ) (4 ) (742 )
HSBC North America Holdings Inc. 31,701 3,763 547 193 36,204 (37 ) (103 ) (175 ) (1 ) (316 )
Grupo Financiero HSBC, S.A. de C.V. 12,619 1,976 379 - 14,974 (37 ) (54 ) (195 ) - (286 )
Other trading entities 8,358 135 284 - 8,777 (16 ) (4 ) (177 ) - (197 )
Holding companies, shared service centres and intra-Group eliminations 79 - - - 79 - - - - -
At 31 Mar 2026 554,765 63,299 20,397 344 638,805 (575 ) (1,108 ) (6,805 ) (71 ) (8,559 )
By legal entity
HSBC UK Bank plc 98,719 10,488 3,430 - 112,637 (180 ) (325 ) (753 ) - (1,258 )
HSBC Bank plc 98,175 5,582 1,756 58 105,571 (68 ) (96 ) (611 ) (29 ) (804 )
The Hongkong and Shanghai Banking Corporation Limited 283,206 33,990 12,837 77 330,110 (171 ) (480 ) (3,694 ) (41 ) (4,386 )
HSBC Bank Middle East Limited 26,643 1,171 1,242 5 29,061 (19 ) (31 ) (630 ) (5 ) (685 )
HSBC North America Holdings Inc. 28,456 3,518 517 193 32,684 (41 ) (100 ) (145 ) (1 ) (287 )
Grupo Financiero HSBC, S.A. de C.V. 12,057 2,268 378 - 14,703 (47 ) (49 ) (190 ) - (286 )
Other trading entities 7,727 164 285 - 8,176 (12 ) (4 ) (180 ) - (196 )
Holding companies, shared service centres and intra-Group eliminations 90 - - - 90 - - - - -
At 31 Dec 2025 555,073 57,181 20,445 333 633,032 (538 ) (1,085 ) (6,203 ) (76 ) (7,902 )
Hong Kong commercial real estate
In the table below, we have disclosed information related to commercial real
estate ('CRE') exposures booked in Hong Kong (excluding exposures to mainland
China borrowers) by stage and credit quality. These exposures mostly comprise
lending to Hong Kong borrowers and, to a lesser degree, borrowers overseas.
Commercial real estate lending to customers - Hong Kong excluding exposure to
mainland China borrowers
31 Mar 2026 31 Dec 2025
$m $m
Gross loans and advances
By stage
Stage 1 10,764 10,666
Stage 2 12,687 13,652
Stage 3 6,033 6,306
By credit quality
Strong 3,299 3,314
Good 7,818 8,225
Satisfactory 9,792 10,352
Sub-standard 2,542 2,427
Credit impaired 6,033 6,306
At 29,484 30,624
Allowance for ECL (1,158 ) (1,077 )
The Hong Kong CRE portfolio (excluding exposure to mainland China borrowers)
saw an increase in allowances for ECL in 1Q26, reflecting continued weakness
in property prices. However, credit migration to the 'credit impaired'
category was significantly reduced in 1Q26. Exposures in this category
continued to be largely comprised of secured book, which represented 56% of
the total portfolio (31 December 2025: 57%).
'Sub-standard' and 'credit-impaired' exposures decreased to $8.6bn (31
December 2025: $8.7bn), of which 94% was secured (31 December 2025: 95%). As
at 28 February 2026, the weighted average loan to value ('LTV'):
- of performing exposures rated 'sub-standard' was 44% (31
December 2025: 42%). There was immaterial exposure with an LTV of greater than
70%, unchanged compared with 31 December 2025; and
- of 'credit-impaired' exposures was 75% (31 December 2025:
71%). Within this portfolio, $2.2bn had an LTV of greater than 70%
(31 December 2025: $1.9bn).
Collateral information and LTV calculations were based on total limits,
inclusive of off-balance sheet commitments of $43.2bn as of 28 February 2026
(31 December 2025: $42.8bn).
The unsecured portfolio remains largely stable, with some migration within
performing credit grades, with 89% of exposures rated 'strong' or 'good' (31
December 2025: 89%). 'Credit impaired' levels are limited. Unsecured exposures
are typically granted to strong, listed Hong Kong CRE developers, which are
commonly members of conglomerate groups with diverse cash flows.
Market conditions continued to stabilise in the first quarter of 2026.
However, pressure on valuations continues and liquidity remains tight,
particularly for mid-sized and sub-investment grade corporates. As the Middle
East conflict continues, inflationary pressures and uncertainty over the
trajectory of interest rates will likely create negative sentiment and a
potential softening of demand. Nevertheless, we continue to observe positive
momentum in the residential property sector as well as improved leasing
activity in the retail property sector, underpinned by a recovery of inbound
tourism and improved consumer demand. Oversupply in the office property sector
is likely to result in pressure on rents and capital values in 2026, although
the broader Hong Kong economy remains resilient.
We continue to closely assess and manage the risk in the portfolio, including
through portfolio reviews and stress testing. Vulnerable borrowers, including
those with debt serviceability challenges and higher LTV levels, are subject
to heightened monitoring and exposure management.
Capital risk
Capital overview
Capital and liquidity adequacy metrics
At
31 Mar 2026 31 Dec 2025
Risk-weighted assets ('RWAs') ($bn)
Credit risk 689.0 687.0
Counterparty credit risk 43.1 42.4
Market risk 32.1 38.5
Operational risk 119.6 120.7
Total risk-weighted assets 883.8 888.6
Capital ($bn)
Common equity tier 1 capital 124.0 132.6
Tier 1 capital 146.2 153.4
Total capital 174.0 182.4
Capital ratios (%)
Common equity tier 1 ratio 14.0 14.9
Tier 1 ratio 16.5 17.3
Total capital ratio 19.7 20.5
Liquidity coverage ratio ('LCR')
Total high-quality liquid assets ($bn) 710.6 702.1
Total net cash outflow ($bn) 525.1 512.1
LCR (%) 135 137
We refer to the UK Capital Requirements Regulation, the PRA Rulebook and any
laws, regulations, requirements, rules, guidelines, standards and policies
relating to capital adequacy, leverage and liquidity adopted by the relevant
regulators, as applicable, and which are applicable to HSBC as the 'Prudential
rules'. Any references to European Union ('EU') regulations and directives
(including technical standards) should, as applicable, be read as references
to the UK's version of such regulation and/or directive, as onshored into UK
law under the European Union (Withdrawal) Act 2018 and as may be subsequently
amended under UK law.
Capital figures and ratios in the previous table are calculated in accordance
with the Prudential rules. Effective 1 January 2025, the IFRS 9 transitional
arrangements came to an end, followed by the end of the UK Capital
Requirements Regulation grandfathering provisions on 28 June 2025. Our capital
figures are therefore the same, for both the transitional and end-point basis.
The LCR is based on the average value of the preceding 12 months.
Regulatory numbers and ratios are as presented at the date of reporting. Small
changes may arise between these numbers and ratios and those subsequently
submitted in regulatory filings. Where differences are significant, we may
restate in subsequent periods.
Capital
At 31 March 2026, our CET1 capital ratio decreased to 14.0% from 14.9% at 31
December 2025, driven by:
- a 1.1 percentage point decrease primarily due to the impact
of strategic transactions, mainly the privatisation of Hang Seng Bank;
- a 0.2 percentage point decrease driven by higher RWAs
excluding foreign exchange translation differences, mainly from asset size
movements, partly offset by asset quality, and methodology and policy changes;
- a 0.1 percentage point decrease mainly due to a fall in the
fair value of hold-to-collect-and-sell debt instruments, following higher
yields, and the net impact from foreign exchange fluctuations; and
- a 0.5 percentage point increase in CET1 capital generation,
mainly through regulatory profits net of dividends.
Our Pillar 2A requirement at 31 March 2026, as per the PRA's Individual
Capital Requirement based on a point-in-time assessment, was equivalent to
2.5% of RWAs, of which 1.5% must be met by CET1. Throughout 1Q26, we complied
with the PRA's regulatory capital adequacy requirement.
Leverage
Leverage ratio
At
31 Mar 2026 31 Dec 2025
$bn $bn
Tier 1 capital (leverage) 146.2 153.4
Total leverage ratio exposure 2,947.0 2,877.1
% %
Leverage ratio 5.0 5.3
Our leverage ratio was 5.0% at 31 March 2026, down from 5.3% at 31 December
2025. The decrease in tier 1 capital led to a 0.2 percentage point fall in the
leverage ratio, which was compounded by a 0.1 percentage point increase in
leverage exposures, primarily due to growth in the balance sheet.
At 31 March 2026, our UK minimum leverage ratio requirement was 3.25%, with an
additional buffer of 0.9% - comprising a 0.7% additional leverage ratio buffer
and a 0.2% countercyclical leverage ratio buffer. These buffers translated
into capital values of $20.6bn and $5.9bn respectively. We exceeded these
leverage requirements throughout 1Q26.
Risk-weighted assets
RWAs by business segment
Hong UK CIB IWPB Corporate Centre Total
Kong RWAs
$bn $bn $bn $bn $bn $bn
Credit risk 109.1 129.5 289.9 70.3 90.2 689.0
Counterparty credit risk 0.1 0.1 40.7 0.7 1.5 43.1
Market risk 0.1 0.1 25.5 0.2 6.2 32.1
Operational risk 23.7 21.5 62.3 17.3 (5.2 ) 119.6
At 31 Mar 2026 133.0 151.2 418.4 88.5 92.7 883.8
At 31 Dec 2025 136.2 149.6 415.4 89.9 97.5 888.6
RWAs by legal entities(1)
HSBC UK Bank plc HSBC Bank plc The Hongkong and Shanghai Banking Corporation Limited HSBC Bank Middle East Limited HSBC North America Holdings Inc Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding companies, shared service centres and intra-Group eliminations Total
RWAs
$bn $bn $bn $bn $bn $bn $bn $bn $bn
Credit risk 135.1 68.8 317.4 19.7 62.2 23.8 49.2 12.8 689.0
Counterparty credit risk 0.3 24.2 11.1 1.0 3.7 0.6 2.2 - 43.1
Market risk(2) 0.3 26.9 18.5 3.4 3.2 0.5 1.8 0.1 32.1
Operational risk 23.9 23.1 63.1 5.1 8.3 6.1 5.8 (15.8 ) 119.6
At 31 Mar 2026 159.6 143.0 410.1 29.2 77.4 31.0 59.0 (2.9 ) 883.8
At 31 Dec 2025 158.0 146.0 411.8 27.2 74.0 32.5 57.0 2.1 888.6
1 Balances are on a third-party Group consolidated basis.
2 Market risk RWAs are non-additive across the legal entities due to
diversification effects within the Group.
RWA movement by legal entities by key driver(1)
Credit risk, counterparty credit risk and operational risk
HSBC UK Bank plc HSBC Bank plc(2) The Hongkong and Shanghai Banking Corporation Limited(2) HSBC Bank Middle East Limited HSBC North America Holdings Inc Grupo Financiero HSBC, S.A. de C.V. Other trading entities Holding Market risk Total RWAs
companies, shared service centres and intra-Group eliminations
$bn $bn $bn $bn $bn $bn $bn $bn $bn $bn
RWAs at 1 Jan 2026 157.9 121.1 392.9 24.8 71.2 31.9 54.9 (4.6 ) 38.5 888.6
Asset size 2.6 (0.2 ) 6.6 1.2 2.4 (1.4 ) 3.3 0.5 (6.3 ) 8.7
Asset quality 1.0 0.2 (4.9 ) - 0.9 (0.1 ) (0.2 ) - - (3.1 )
Model updates 0.1 - (0.5 ) - - - - - - (0.4 )
Methodology and policy (0.4 ) (2.4 ) 0.6 (0.2 ) (0.2 ) - - 1.2 (0.1 ) (1.5 )
Acquisitions and disposals(2) - (1.5 ) (2.0 ) - - - - - - (3.5 )
Foreign exchange movements(3) (1.9 ) (1.1 ) (1.1 ) - (0.1 ) 0.1 (0.8 ) (0.1 ) - (5.0 )
Total RWA movement 1.4 (5.0 ) (1.3 ) 1.0 3.0 (1.4 ) 2.3 1.6 (6.4 ) (4.8 )
RWAs at 31 Mar 2026 159.3 116.1 391.6 25.8 74.2 30.5 57.2 (3.0 ) 32.1 883.8
RWA movement by business segment by key driver
Credit risk, counterparty credit risk and operational risk Market Total
risk RWAs
Hong UK CIB IWPB(2) Corporate
Kong Centre(2)
$bn $bn $bn $bn $bn $bn $bn
RWAs at 1 Jan 2026 135.6 149.6 390.9 89.6 84.4 38.5 888.6
Asset size 1.1 2.5 8.1 0.1 3.2 (6.3 ) 8.7
Asset quality (3.5 ) 0.8 (0.1 ) (0.3 ) - - (3.1 )
Model updates (0.5 ) 0.1 - - - - (0.4 )
Methodology and policy 0.8 (0.2 ) (2.8 ) 0.4 0.4 (0.1 ) (1.5 )
Acquisitions and disposals(2) - - (0.9 ) (1.0 ) (1.6 ) - (3.5 )
Foreign exchange movements(3) (0.6 ) (1.7 ) (2.3 ) (0.5 ) 0.1 - (5.0 )
Total RWA movement (2.7 ) 1.5 2.0 (1.3 ) 2.1 (6.4 ) (4.8 )
RWAs at 31 Mar 2026 132.9 151.1 392.9 88.3 86.5 32.1 883.8
1 Balances are on a third-party Group consolidated basis.
2 Includes changes in the allocation of $0.5bn significant investment RWAs
from HSBC Bank plc to The Hongkong and Shanghai Banking Corporation Limited,
following the disposal of the UK life insurance business.
3 Credit risk foreign exchange movements in this disclosure are computed by
retranslating RWAs into US dollars based on the underlying transactional
currencies, and other movements in the table are presented on a constant
currency basis.
Overall, RWAs decreased by $4.8bn during 1Q26, primarily due to a decline in
market risk RWAs, foreign currency translation differences, strategic
transactions and asset quality movements, partly offset by increased corporate
lending.
Asset size
Asset size increased by $8.7bn, of which $15.0bn related to credit risk asset
size, largely driven by higher corporate lending in our CIB and UK businesses,
and in SAB within Corporate Centre.
Market risk RWAs decreased by $6.3bn, largely driven by approximately $7bn
from the reversal of foreign exchange ('FX') hedges associated with the
privatisation of Hang Seng Bank, partly offset by other movements in FX
positions.
Asset quality
The $3.1bn decrease in RWAs was primarily due to credit quality improvements
and portfolio mix changes mainly in our Hong Kong business, partly offset by
credit risk migrations and portfolio mix changes in our UK business.
Model updates
The decrease of $0.4bn in RWAs was primarily driven by the implementation of a
model for Hong Kong mortgages.
Methodology and policy
The $1.5bn decrease in RWAs was primarily due to credit risk parameter
changes, including methodology changes to our undrawn exposures within the CIB
business. This was partly offset by risk parameter updates in our Hong Kong
business.
Acquisitions and disposals
RWAs decreased by $3.5bn as a result of increased threshold deductions from
CET1 capital due to the privatisation of Hang Seng Bank and the sale of our
business in South Africa.
Additional information
Dividends
Fourth interim dividend for 2025
On 25 February 2026, the Directors approved a fourth interim dividend for 2025
of $0.45 per ordinary share, which was paid on 30 April 2026 in cash. The
pound sterling and Hong Kong dollar amounts of approximately £0.333016 and
HK$3.522942 were calculated using the forward exchange rates quoted by HSBC
Bank plc in London at or about 11.00am on 20 April 2026.
First interim dividend for 2026
On 5 May 2026, the Directors approved a first interim dividend in respect of
the financial year ending 31 December 2026 of $0.10 per ordinary share (the
'dividend'), an expected distribution of approximately $1.72bn. The dividend
will be payable on 26 June 2026 to holders of record on the Principal Register
in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas
Branch Register on 15 May 2026.
The dividend will be payable in US dollars, or in pounds sterling or Hong Kong
dollars at the forward exchange rates quoted by HSBC Bank plc in London at or
about 11.00am local time on 15 June 2026. The ordinary shares in London, Hong
Kong and Bermuda will be quoted ex-dividend on 14 May 2026. American
Depositary Shares ('ADSs') in New York will be quoted ex-dividend on 15 May
2026.
The default currency on the Principal Register in the UK is pounds sterling,
and dividends can also be paid in Hong Kong dollars or US dollars, or a
combination of these currencies. International shareholders can register to
join the Global Dividend Service to receive dividends in their local
currencies. Please register and read the terms and conditions at
www.investorcentre.co.uk. UK shareholders can also register their pounds
sterling bank mandates at www.investorcentre.co.uk.
The default currency on the Hong Kong Overseas Branch Register is Hong Kong
dollars, and dividends can also be paid in US dollars or pounds sterling, or a
combination of these currencies. Shareholders can arrange for direct credit of
Hong Kong dollar cash dividends into their bank account, or arrange to send US
dollar or pounds sterling cheques to the credit of their bank account.
Shareholders can register for these services at www.investorcentre.com/hk.
Shareholders can also download a dividend currency election form from
www.hsbc.com/dividends, www.investorcentre.com/hk, or www.hkexnews.hk.
The default currency on the Bermuda Overseas Branch Register is US dollars,
and dividends can also be paid in Hong Kong dollars or pounds sterling, or a
combination of these currencies. Shareholders can change their dividend
currency election by contacting the Bermuda investor relations team.
Shareholders can download a dividend currency election form from
www.hsbc.com/dividends.
Changes to currency elections must be received by 10 June 2026 to be effective
for this dividend.
The dividend will be payable on ADSs, each of which represents five ordinary
shares, on 26 June 2026 to holders of record on 15 May 2026. The dividend of
$0.50 per ADS will be payable by the depositary in US dollars. Alternatively,
the cash dividend may be invested in additional ADSs by participants in the
dividend reinvestment plan operated by the depositary. Elections must be
received by 5 June 2026.
Any person who has acquired ordinary shares registered on the Principal
Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda
Overseas Branch Register but who has not lodged the share transfer with the
Principal Registrar in the UK, Hong Kong Overseas Branch Registrar or Bermuda
Overseas Branch Registrar should do so before 4.00pm local time on 15 May 2026
in order to receive the dividend.
Ordinary shares may not be removed from or transferred to the Principal
Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda
Overseas Branch Register on 15 May 2026. Any person wishing to remove ordinary
shares to or from each register must do so before 4.00pm local time on 14 May
2026.
Transfers of ADSs must be lodged with the depositary by 11.00am local time on
15 May 2026 in order to receive the dividend. ADS holders who receive a cash
dividend will be charged a fee, which will be deducted by the depositary, of
$0.005 per ADS per cash dividend.
Dividend on preference shares
A quarterly dividend of £0.01 per Series A sterling preference share is
payable on 16 March, 15 June, 15 September and 15 December 2026 for the
quarter then ended at the sole and absolute discretion of the Board of HSBC
Holdings plc. Accordingly, the Board of HSBC Holdings plc has approved a
quarterly dividend to be payable on 15 June 2026 to holders of record on 29
May 2026.
For and on behalf of
HSBC Holdings plc
Angela McEntee
Group Company Secretary
The Board of Directors of HSBC Holdings plc as at the date of this
announcement comprises: Brendan Robert Nelson(*), Georges Bahjat Elhedery,
Geraldine Joyce Buckingham(†), Wei Sun Christianson(†), Rachel Duan(†),
Dame Carolyn Julie Fairbairn(†), James Anthony Forese(†), Ann Frances
Godbehere(†), Steven Craig Guggenheimer(†), Manveen (Pam) Kaur, Dr José
Antonio Meade Kuribreña(†), Kalpana Jaisingh Morparia(†), Eileen K
Murray(†) and Swee Lian Teo(†).
* Independent non-executive Chairman
† Independent non-executive Director
Cautionary statement regarding forward-looking statements
This Earnings Release 1Q26 contains certain forward-looking statements with
respect to HSBC's financial condition; results of operations and business,
including the strategic priorities; financial, investment and capital targets;
and environmental, social and governance ('ESG') ambitions, targets and
commitments described herein.
Statements that are not historical facts, including statements about HSBC's
beliefs and expectations, are forward-looking statements. Words such as 'may',
'will', 'should', 'expects', 'targets', 'anticipates', 'intends', 'plans',
'believes', 'seeks', 'estimates', 'potential' and 'reasonably possible', or
the negative thereof, other variations thereon or similar expressions are
intended to identify forward-looking statements. These statements are based on
current plans, information, data, estimates and projections, and therefore
undue reliance should not be placed on them. Forward-looking statements speak
only as of the date they are made. HSBC makes no commitment to revise or
update any forward-looking statements to reflect events or circumstances
occurring or existing after the date of any forward-looking statements.
Written and/or oral forward-looking statements may also be made in the
periodic reports to the US Securities and Exchange Commission, summary
financial statements to shareholders, offering circulars and prospectuses,
press releases and other written materials, and in oral statements made by
HSBC's directors, officers or employees to third parties, including financial
analysts. Forward-looking statements involve inherent risks and uncertainties.
Readers are cautioned that a number of factors could cause actual results to
differ, in some instances materially, from those anticipated or implied in any
forward-looking statement. These include, but are not limited to:
- changes in general economic conditions in the markets in
which we operate, such as new, continuing or deepening recessions, prolonged
inflationary pressures and fluctuations in employment levels and the
creditworthiness of customers beyond those factored into consensus forecasts;
the Russia-Ukraine war, the conflict in the Middle East that began on 28
February 2026, or any potential military action or conflict elsewhere, and
their impact on global economies and the markets where HSBC operates, which
could have a material adverse effect on (among other things) our financial
condition, results of operations, prospects, liquidity, capital position and
credit ratings; deviations from the market and economic assumptions that form
the basis for our ECL measurements (including, without limitation, as a result
of the Russia-Ukraine war, the conflict in the Middle East, or any potential
military action or conflict elsewhere, inflationary pressures, commodity price
changes, and ongoing developments in the commercial real estate sector and the
residential property sector in mainland China and Hong Kong); potential
changes in HSBC's dividend policy; changes and volatility in foreign exchange
rates and interest rates levels, including fluctuations in Hibor and the
accounting impact resulting from financial reporting in respect of
hyperinflationary economies; volatility in equity markets and the risk of
disruptive correction stemming from high company valuations; lack of liquidity
in wholesale funding or capital markets, which may affect our ability to meet
our obligations under financing facilities or to fund new loans, investments
and businesses; geopolitical tensions or diplomatic developments producing
social instability or legal uncertainty, such as the Russia-Ukraine war, the
conflict in the Middle East, or any potential military action or conflict
elsewhere, and the related imposition of sanctions, export-control and trade
and investment restrictions, as well as increased market volatility, supply
chain restrictions and disruptions, sustained increases in energy prices and
key commodity prices, claims of human rights violations, diplomatic tensions
between China and the US, which may extend to and involve other countries and
territories, and developments in Hong Kong and Taiwan and the surrounding
maritime region, alongside other potential areas of tension, which may
adversely affect HSBC by creating regulatory, reputational and market risks;
the efficacy of government, customer, and HSBC's actions in managing and
mitigating ESG-related risks, in particular climate risk, nature-related risks
and human rights risks, and in supporting the global transition to net zero
carbon emissions, each of which can impact HSBC both directly and indirectly
through our customers and which may result in potential financial and
non-financial impacts; illiquidity and downward price pressure in national
real estate markets; adverse changes in central banks' policies with respect
to the provision of liquidity support to financial markets; heightened market
concerns over sovereign creditworthiness in over-indebted countries; adverse
changes in the funding status of public or private defined benefit pensions;
the significant depreciation of the US dollar through 2025, with volatility
expected to persist; societal shifts in customer financing and investment
needs, including consumer perception as to the continuing availability of
credit; exposure to counterparty risk, including third parties using us as a
conduit for illegal activities without our knowledge; and price competition in
the market segments we serve;
- changes in government policy and regulation, as well as
monetary, fiscal, interest rate and other policies of central banks and other
regulatory authorities in the major markets in which we operate and the
consequences thereof (including, without limitation, actions taken as a result
of changes in government following national elections, higher social welfare
commitments and increased government expenditure on defence, energy security
and climate transition in the markets where the Group operates); continued
volatility in trade and tariff policies, changes in tariff rates, including
sector-specific levies imposed by various nations, including the US, which
could further disrupt supply chains and reduce global trade growth;
initiatives to change the size, scope of activities and interconnectedness of
financial institutions in connection with the implementation of stricter
regulation of financial institutions in key markets worldwide; revised capital
and liquidity benchmarks, which could serve to deleverage bank balance sheets
and lower returns available from the current business model and portfolio mix;
changes to tax laws and tax rates applicable to HSBC, including the imposition
of levies or taxes designed to change business mix and risk appetite; the
practices, pricing or responsibilities of financial institutions serving their
consumer markets; expropriation, nationalisation, confiscation of assets and
changes in legislation relating to foreign ownership; the UK's relationship
with the EU, particularly with respect to the potential divergence of UK and
EU law on the regulation of financial services; changes in government approach
and regulatory treatment in relation to ESG disclosures and reporting
requirements, and the current lack of a single standardised regulatory
approach to ESG across all sectors and markets; changes in UK macroeconomic
and fiscal policy, which may result in fluctuations in the value of the pound
sterling; general changes in government policy (including, without limitation,
actions taken as a result of changes in government following national
elections in the markets where the Group operates) that may significantly
influence investor decisions; the costs, effects and outcomes of regulatory
reviews, actions or litigation, including any additional compliance
requirements; and the effects of competition in the markets where we operate
including increased competition from non-bank financial services companies;
and
- factors specific to HSBC, including our success in
adequately identifying the risks we face, such as the incidence of loan losses
or delinquency, and managing those risks (through account management, hedging
and other techniques); our ability to achieve our financial, investment,
capital and ESG ambitions, targets and commitments (including the positions
set forth in our thermal coal phase-out policy and our energy policy and our
targets to reduce our on-balance sheet financed emissions and, where
applicable, facilitated emissions in our portfolio of selected high-emitting
sectors), which may result in our failure to achieve any of the expected
outcomes of our strategic priorities and may result in reputational risks;
evolving regulatory requirements and the development of new technologies,
including AI, affecting how we manage risk, including model risk; model
limitations or failure, including, without limitation, the impact that high
inflationary pressures and interest rates have had on the performance and
usage of financial models, which may require us to hold additional capital,
incur losses and/or use compensating controls, such as judgemental post-model
adjustments, to address model limitations; changes to the judgements,
estimates and assumptions we base our financial statements on; changes in our
ability to meet the requirements of regulatory stress tests; a reduction in
the credit ratings assigned to us or any of our subsidiaries, which could
increase the cost or decrease the availability of our funding and affect our
liquidity position and net interest margin; changes to the reliability and
security of our data management, data privacy, information and technology
infrastructure, including threats from cyber-attacks, which may impact our
ability to service clients and may result in financial loss, business
disruption and/or loss of customer services and data; the accuracy and
effective use of data, including internal management information that may not
have been independently verified; changes in insurance customer behaviour and
insurance claim rates; our dependence on loan payments and dividends from
subsidiaries to meet our obligations; changes in our reporting frameworks and
accounting standards, which have had and may continue to have a material
impact on the way we prepare our financial statements; our ability to
successfully execute planned strategic acquisitions and disposals; our success
in adequately integrating acquired businesses into our business; our ability
to successfully execute and implement the announced strategic reorganisation
of the Group; changes in our ability to manage third-party, fraud, financial
crime and reputational risks inherent in our operations; employee misconduct,
which may result in regulatory sanctions and/or reputational or financial
harm; changes in skill requirements, ways of working and talent shortages,
which may affect our ability to recruit and retain senior management and an
inclusive and skilled workforce; and changes in our ability to develop
sustainable finance and ESG-related products consistent with the evolving
expectations of our regulators, and our capacity to measure the environmental
and social impacts from our financing activity (including as a result of data
limitations and changes in methodologies), which may affect our ability to
achieve our ESG ambitions, targets and commitments, including our net zero
ambition, our targets to reduce on-balance sheet financed emissions and, where
applicable, facilitated emissions in our portfolio of selected high-emitting
sectors and the positions set forth in our thermal coal phase-out policy and
our energy policy, and increase the risk of greenwashing. Effective risk
management depends on, among other things, our ability through stress testing
and other techniques to prepare for events that cannot be captured by the
statistical models it uses; our success in addressing operational, legal and
regulatory, and litigation challenges; and other risks and uncertainties we
identify in 'Risk - Managing risk' on page 34 of this Earnings Release 1Q26.
Additional detailed information concerning important factors, including but
not limited to ESG-related factors, that could cause actual results to differ
materially from those anticipated or implied in any forward-looking statement
in this Earnings Release 1Q26 is available in our Annual Report and Accounts
for the fiscal year ended 31 December 2025, which was filed with the SEC on
Form 20-F on 26 February 2026.
Investor relations/media relations contacts
For further information contact:
Investor relations Media relations
UK - Alastair Ryan UK - HSBC Group Press Office
Telephone: +44 (0)7468 703 010 Telephone: +44 (0)20 7991 8096
Email: investorrelations@hsbc.com Email: pressoffice@hsbc.com
Hong Kong - Yafei Tian Hong Kong - Aman Ullah
Telephone: +852 2899 8909 Telephone: +852 3941 1120
Email: investorrelations@hsbc.com.hk Email: aspmediarelations@hsbc.com.hk
Abbreviations
1Q25 First quarter of 2025
1Q26 First quarter of 2026
2Q26 Second quarter of 2026
4Q25 Fourth quarter of 2025
ADR American Depositary Receipt
ADS American Depositary Share
AI Artificial intelligence
AIEA Average interest-earning assets
Banking NII Banking net interest income
BoCom Bank of Communications Co., Limited, one of China's largest banks
BoE Bank of England
Bps Basis points. One basis point is equal to one-hundredth of a percentage point
CET1 Common equity tier 1
CIB Corporate and Institutional Banking, a business segment
CODM Chief Operating Decision Maker
Corporate Centre Corporate Centre comprises Central Treasury, our legacy businesses, interests
in our associates and joint ventures, central stewardship costs and
consolidation adjustments
CRE Commercial real estate
CSM Contractual service margin
Dec December
ECL Expected credit losses. In the income statement, ECL is recorded as a change
in expected credit losses and other credit impairment charges. In the balance
sheet, ECL is recorded as an allowance for financial instruments to which only
the impairment requirements in IFRS 9 are applied
ECM Equity capital markets
ESG Environmental, social and governance
EU European Union
FVOCI Fair value through other comprehensive income
FX Foreign exchange
GAAP Generally accepted accounting principles
GDP Gross domestic product
GPS Global Payments Solutions
Group HSBC Holdings together with its subsidiary undertakings
GTS Global Trade Solutions
Hang Seng Bank Hang Seng Bank Limited, one of Hong Kong's largest banks
Hibor Hong Kong interbank offered rate
Hong Kong Hong Kong Special Administrative Region of the People's Republic of China
HSBC HSBC Holdings together with its subsidiary undertakings
HSBC Bank plc HSBC Bank plc, also known as the non-ring-fenced bank
HSBC Holdings HSBC Holdings plc, the parent company of HSBC
HSBC UK HSBC UK Bank plc, also known as the ring-fenced bank
IAS International Accounting Standards
Ibor Interbank offered rate
IFRS Accounting Standards International Financial Reporting Standards as issued by the International
Accounting Standards Board
IWPB International Wealth and Premier Banking, a business segment
LCR Liquidity coverage ratio
Long term For our financial targets, we define long term as five to six years,
commencing 1 January 2026
LTV Loan to value
Mainland China People's Republic of China excluding Hong Kong and Macau
Mar March
Medium term For our financial targets, we define medium term as three to five years,
commencing 1 January 2026
Net operating income Net operating income before change in expected credit losses and other credit
impairment charges, also referred to as revenue
NII Net interest income
NIM Net interest margin
NNM Net new money
PD Probability of default
POCI Purchased or originated credit-impaired financial assets
PRA Prudential Regulation Authority (UK)
Prudential rules Refers to the UK Capital Requirements Regulation, the PRA Rulebook and any
laws, regulations, requirements, rules, guidelines, standards and policies
relating to capital adequacy, leverage and liquidity adopted by the relevant
regulators, as applicable, and which are applicable to HSBC
Revenue Net operating income before change in ECL
RoE Return on average ordinary shareholders' equity
RoTE Return on average tangible equity
RWA Risk-weighted asset
SAB Saudi Awwal Bank, which was formed from the merger between The Saudi British
Bank and Alawwal Bank
UAE United Arab Emirates
UK United Kingdom
UK Capital Requirements Regulation Refers to Regulation (EU) No. 575/2013, as amended or supplemented, as it
forms part of domestic law in the UK by virtue of the European Union
(Withdrawal) Act 2018, as amended
US United States of America
$m/$bn/$tn United States dollar millions/billions/trillions. We report in US dollars
Registered office and Group head office: 8 Canada Square, London, E14 5HQ,
United Kingdom
Web: www.hsbc.com
Incorporated in England and Wales with limited liability. Registration number
617987
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