HSBC (HSBA) Q3 2025 earnings summary

Executive summary

• Achieved strong financial momentum with annualized ROTE of 17.6% year-to-date (excluding notable items), upgraded 2025 targets for NII and ROTE, and reported 3% YoY revenue growth to $17.9bn in Q3, driven by banking NII and robust fee and other income, especially in wealth management.

• Announced intention to privatize Hang Seng Bank, aiming for operational efficiencies and growth in Hong Kong, expected to reduce CET1 by 125bps upon completion.

• Continued strategic exits from non-core businesses, with 11 exits announced year-to-date, including Malta and Sri Lanka retail banking, and ongoing review of Egyptian retail banking.

• Reported profit before tax for 3Q25 was $7.3bn, down $1.2bn YoY, mainly due to $1.4bn in legal provisions and higher operating expenses, partially offset by revenue growth in Wealth and net interest income.

• Excluding notable items, constant currency profit before tax rose 3% in 3Q25 and 4% in 9M25, driven by strong Wealth and CIB performance.

Financial highlights

• Q3 profit before tax reached $9.1bn excluding notable items; reported PBT was $7.3bn due to legal provisions.

• CET1 capital ratio stood at 14.5% at 30 Sep 2025.

• Customer deposit balances at $1.7tn, with $86bn growth over 12 months.

• Wealth management fee and other income grew 29% YoY to $2.7bn; net new invested assets of $29bn, over half from Asia.

• ECL charge was $1bn in Q3, flat YoY and down from Q2; ECL as % of average gross loans: 0.40%.

Outlook and guidance

• Upgraded 2025 banking NII guidance to $43bn or better; 2025 ROTE (excluding notable items) expected to be mid-teens or better.

• Targeting around 3% cost growth in 2025 compared to 2024.

• Dividend payout ratio for 2025 targeted at 50% of earnings per ordinary share, excluding material notable items.

• CET1 capital ratio target range maintained at 14%-14.5%, with temporary dip expected post-Hang Seng Bank privatisation.

• ECL charges as a percentage of average gross loans expected to remain around 40bps in 2025.