HSBC Holdings plc

Reported figures for the quarter included revenue of USD 19 billion, up 7% year on year on a constant-currency basis, and profit before tax of USD 10.3 billion, up 13%. Annualized return on tangible equity was 19.5% for Q2 and 19.1% for the first half. Banking NII increased USD 0.8 billion year on year to USD 11.6 billion, wealth fee and other income rose 21% to USD 2.8 billion, and the second-quarter ECL charge was USD 1.1 billion, or 41 basis points annualized. CET1 was 14.1%, up 10 basis points from Q1, while deposits increased USD 46 billion in the quarter and loans increased USD 20 billion. Forward guidance: HSBC raised full-year banking NII guidance to at least USD 46 billion. It reiterated 2026 cost growth guidance of around 1% and said targeted organizational simplification savings were being raised to USD 2 billion, to be actioned by year-end. It also reiterated medium-term targets of revenue growth rising to 5% by 2028, return on tangible equity of 17% or better each year, and a 50% dividend payout ratio for 2026, excluding notable items and related impacts. The company announced up to USD 1 billion of share buybacks.

Georges Elhedery framed the quarter as evidence that HSBC’s focused strategy is working, saying momentum accelerated across the bank and that all four businesses are growing with returns above target. He emphasized leadership positions in Hong Kong, the U.K., Wealth, and transaction banking, and said the bank is reallocating capital away from lower-return businesses toward areas with stronger structural growth. His tone was confident but disciplined: growth is welcome, but only at the right returns and within risk appetite.

Manveen Kaur highlighted broad-based Q2 strength, including 7% revenue growth, 13% PBT growth, and 19.5% ROTE, with all four businesses above the group target on returns excluding notable items. She said Banking NII rose to USD 11.6 billion in the quarter and that the full-year outlook was being raised to at least USD 46 billion, helped by balance-sheet growth, a supportive rate backdrop, and the reinvestment of USD 50 billion of maturing structural hedge assets. On capital and returns, she pointed to a 14.1% CET1 ratio, 100 basis points of capital generation from regulatory profits, 30 basis points consumed by balance-sheet growth, and the decision to restart buybacks with up to USD 1 billion. She also reiterated around 1% cost growth for 2026, noted the Q2 ECL charge of USD 1.1 billion, and said the credit outlook remains around 45 basis points for the full year.

Analysts focused on whether stronger growth opportunities would shift capital priority away from buybacks and toward reinvestment. Management said organic growth comes first, then dividends, and that excess capital is returned via buybacks, while also stressing that new investments must clear return hurdles and remain within risk appetite. Questions also centered on NII durability, cost growth, and the effect of HIBOR and hedge moves; management said the NII guidance includes buffers for volatility but still sees at least USD 46 billion as comfortable. Analysts pressed on Hong Kong CRE and Middle East credit risk, and HSBC said Hong Kong CRE is stabilizing, the existing Middle East reserve remains in place, and the specific Middle East scenario has been folded into the downside case.