HSBC Holdings Navigates Uncertain Economic Landscape in Q1 2025
Why we think this is neutral
HSBC Holdings reported a mixed performance in Q1 2025, with revenue declining 15% year-over-year due to the impact of business disposals. While the company saw strong performances in its Wealth and Wholesale Transaction Banking businesses, it also faced higher expected credit losses and other challenges stemming from the uncertain economic environment, including geopolitical tensions and higher trade tariffs. The company's CET1 capital ratio decreased slightly, but it continues to maintain a strong financial position. Overall, the results suggest HSBC is navigating the current market conditions, but faces some headwinds.
Key Points
- Profit before tax decreased by $3.2bn to $9.5bn
- Revenue decreased by 15% to $17.6bn due to business disposals
- Strong performances in Wealth and Wholesale Transaction Banking
- CET1 capital ratio decreased to 14.7% from 14.9%
- First interim dividend of $0.10 per share announced for 2025
Summary
HSBC Holdings plc reported its Q1 2025 results, with profit before tax decreasing by $3.2bn to $9.5bn compared to Q1 2024. This was primarily due to the non-recurrence of gains from business disposals in the prior year. Revenue decreased by 15% to $17.6bn, reflecting the impact of business disposals, notably in Canada and Argentina. However, the company saw strong performances in its Wealth and Wholesale Transaction Banking businesses, which helped offset a reduction in net interest income. The CET1 capital ratio decreased to 14.7% from 14.9% in Q4 2024, driven by an increase in risk-weighted assets. The company also announced a first interim dividend of $0.10 per share for 2025.