HSBC Q2 2025 presentation reveals 5% revenue growth, $3bn share buyback

HSBC Holdings plc (NYSE:HSBC) (LSE:HSBA) delivered a solid performance in the second quarter of 2025, with revenue growing 5% year-over-year excluding notable items, according to the bank’s presentation to investors and analysts on July 30. The global banking giant also announced an additional share buyback program of up to $3 billion, continuing its commitment to shareholder returns.

Quarterly Performance Highlights

HSBC reported profit before tax of $6.3 billion for Q2 2025, or $9.2 billion when excluding notable items, which remained stable compared to the same period last year. The bank achieved a return on tangible equity (RoTE) of 17.7% excluding notable items, representing a 1.2 percentage point improvement year-over-year.

As shown in the following comprehensive financial summary, HSBC maintained strong capital and liquidity positions, with a CET1 ratio of 14.6% and continued growth in both deposits and loans:

Revenue excluding notable items reached $17.7 billion in Q2 2025, up 5% from the previous year, driven primarily by strong performance in fee and other income. Notable items totaling $(2.8) billion included BoCom dilution and impairment losses, as well as cost notables.

The bank’s business segment performance showed strong results across key markets, with Hong Kong and the UK delivering RoTEs of 34.9% and 23.4%, respectively:

Strategic Initiatives

HSBC continues to execute its strategy of focusing on priority growth areas while exiting non-strategic activities. The bank announced in February 2025 a plan to exit activities with costs of approximately $1.5 billion, reallocating these resources to priority growth areas.

"We’re making disciplined progress on our strategic priorities, with $0.7 billion of simplification savings actioned and seven exits announced since Q1 2025," noted the company in its presentation.

The following revenue analysis illustrates how HSBC’s strategic focus is driving growth, particularly in Wealth and Wholesale Transaction (JO:NTUJ) Banking, which offset a slight decrease in Banking Net Interest Income:

HSBC’s Banking Net Interest Income (NII) saw a slight decrease quarter-over-quarter, but the bank maintained its full-year 2025 guidance of approximately $42 billion:

Detailed Financial Analysis

Wholesale Transaction Banking showed consistent growth across all products, with fee and other income increasing by 5% year-over-year. Foreign exchange services grew by 7%, capturing elevated client activity due to market volatility and geopolitical events:

The Wealth business demonstrated particularly strong performance, with fee and other income growing 22% year-over-year. This growth was supported by strong client activity and strategic execution:

On the credit front, HSBC revised its full-year 2025 ECL (Expected Credit Loss) guidance to approximately 40 basis points, incorporating current market conditions in the Hong Kong commercial real estate sector:

Cost management remains a key focus area, with the bank on track for its fiscal year 2025 cost guidance. HSBC now expects approximately $0.4 billion of simplification savings in FY25 P&L, with additional savings of $1.1 billion in FY26 and $1.5 billion in FY27:

Forward-Looking Statements

HSBC reiterated its mid-teens RoTE target for 2025, 2026, and 2027, excluding notable items, demonstrating confidence in its strategic direction despite economic uncertainties. The bank highlighted its strong deposit franchise with $1.7 trillion in deposits (up 1% quarter-over-quarter) and high-quality loan portfolio as key strengths in navigating the current economic environment.

"We remain confident in delivering our targets and guidance," the bank stated, emphasizing its momentum in financial performance with 5% year-over-year growth in deposits, 2% in loans, 22% in Wealth fee and other income, and 5% in Wholesale Transaction Banking fee and other income.

The bank’s continued focus on shareholder returns is evidenced by the declaration of a $0.10 dividend per share for Q2 2025 ($0.20 for 1H25) and the announcement of an up to $3 billion share buyback. Since Q1 2023, HSBC has repurchased 13% of its issued share count, underscoring its commitment to returning excess capital to shareholders while maintaining a strong balance sheet.

As HSBC continues to invest in priority growth areas including its home markets of Hong Kong and the UK, Corporate and Institutional Banking, International Wealth and Premier Banking, and AI/Gen AI capabilities, the bank appears well-positioned to navigate economic uncertainties while delivering on its financial targets.

Full presentation:

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