30 July 2025
If you are covering HSBC’s latest financial results, please find below a comment from Will Howlett, financials analyst at Quilter Cheviot:
“HSBC's results are a bit messy with accounting noise relating to its stake in China’s Bank of Communications (BoCom) and also elevated restructuring charges. The underlying picture is better and profitability remains strong, allowing HSBC to declare a further $3.0bn share buyback.
“Guidance has largely been reiterated with the exception of loan losses which are now at the top end of the prior guide due to Hong Kong commercial real estate market.
“Despite the messiness, it was overall a good second quarter for HSBC with profits flat, but well ahead of expectations. Revenues increased 5%, also comfortably ahead of expectations and while net interest income fell by 3%, this too was better than expected. Meanwhile, HSBC’s wealth business continues to be strong with 22% growth year on year.
“HSBC has also taken a $1.1bn hit relating to loan losses in the second quarter, with much of this as a result of a poor commercial real estate market in Hong Kong. Despite this, the business continues to reward shareholders well, with a further $3bn share buyback coming soon after $5bn was announced in the prior two sets of results. Meanwhile the ongoing dividend was maintained is provides a healthy yield at 5.6%, taking overall shareholder returns for the year to around 11%.
“While the second quarter was clearly a little more challenging for HSBC, it does continue to execute well and is trading in line with the market. For investors, however, there are cleaner narratives out there though.”
