HSBC reported 6 percent revenue growth over the first quarter of 2026, with topline coming in at US$18.6 billion. However, higher than expected credit losses (ECL) of US$1.3 billion lowered profits before taxes to US$9.4 billion, a 4 percent contraction from the year ago.
Net interest margin was 1.6 percent, slightly higher than the first quarter of 2025, but 4 basis points lower than the fourth quarter, due to the impact of one-off items when it completed the privatisation of Hang Seng Bank and the sale of UK Life, Sri Lanka retail banking and its South African business earlier in the year.
As a percentage of average gross loans and advances, including held-for sale loan balances, ECL reached 52 basis points for the quarter. For 2026, the bank is raising its ECL outlook to 45 basis points from an earlier projection of 40 basis points.
[See more: Hang Seng Bank shareholders approve HSBC’s US$14 billion buyout]
Of the US$1.3 billion, US$300 million is being set aside as it relates to the Middle East conflict while US$400 million due to fraud-related charges tied to a financial sponsor in the United Kingdom. The bank noted that Hong Kong’s commercial real estate market was stable.
The bank’s Hong Kong business, which accounts for more than a fifth of its revenue, rose 2.5 percent to US$4 billion. Corporate and institutional banking, which makes up about 40 percent of the topline, rose 5.7 percent.
On the operations side, first quarter loans rose 2 percent from the previous quarter while customer deposits increased 1 percent. Dividends per share were US$0.10, unchanged from the first quarter of a year ago. In 2025, HSBC paid out US$0.75 in dividends per share, which was a 14 percent increase from 2024.
[See more: HSBC privatisation of Hang Seng Bank: How the deal affects your money and shares]
On guidance, net interest income was upgraded to US$46 billion from US$45 billion, reflecting an improved rate outlook. The bank reported net interest income of US$44.8 billion in 2025.
The bank is looking at a 5 percent revenue target this year with a return on tangible equity of 17 percent. Dividends would be 50 percent of EPS. HSBC said it was on pace to deliver US$1.5 billion of annual cost savings by June.
Hong Kong shares of HSBC fell more than 5 percent yesterday after the announcement.
