Company Announcements

5 May 2026

"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."

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.

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:

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.

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.

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.

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').

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:

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.

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.

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.

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.

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).

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.

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.

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.

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.

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.

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.

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.

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.

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.

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%.

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 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:

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.