HSBC reports 1H EPS 65c vs. 88c last year

Reports 1H revenue $34.1B vs. $37.3B last year. Profit before tax decreased by $5.7B to $15.8B compared with 1H24, primarily due to the recognition of dilution and impairment losses of $2.1B related to our associate Bank of Communications. In addition, there was an adverse impact from the non-recurrence of $3.6B in net gains in 1H24 relating to the disposals of our banking business in Canada and our business in Argentina. Profit after tax of $12.4B was $5.2B or 30% lower compared with 1H24. Constant currency profit before tax excluding notable items increased by $0.9B to $18.9B compared with 1H24, from a strong performance in Wealth in our International Wealth and Premier Banking and Hong Kong business segments, supported by higher customer activity, and in Foreign Exchange and Debt and Equity Markets driven by volatile market conditions. This was partly offset by higher expected credit losses and other credit impairment charges and a targeted increase in operating expenses, which included higher spend and investment in technology. Net interest margin of 1.57% decreased by 5 basis points compared with 1H24, mainly due to an adverse impact from foreign currency translation differences and the disposal of our business in Argentina, partly offset by the benefit of our structural hedge. Common equity tier 1 capital ratio of 14.6% decreased by 0.3 percentage points compared with 31 December 2024, driven by an increase in risk-weighted assets, partly offset by an increase in CET1 capital through profit generation net of distributions. The increase in RWAs was mainly driven by foreign currency translation differences and asset size movements. “We’re making positive progress in becoming a simple, more agile, focused organisation built on our core strengths. In the first half, we continued to execute our strategy with discipline and each of our four businesses sustained momentum in their earnings with each growing revenue. This gives us confidence in our ability to deliver our targets. We continue to navigate this period of economic uncertainty and market volatility from a position of strength, putting the changing needs of our customers at the heart of everything we do,” said CEO Georges Elhedery.