HSBC Q2 2025 Earnings: Pretax Profit Misses Estimates, Buyback Resumes, and CEO Elhedery's Overhaul Accelerates

Excluding notable items, however, Q2 pretax profit was $9.2 billion, stable year-on-year. Revenue excluding notable items rose 5% to $17.7 billion .

First-Half 2025: Underlying Profit Rises 5%

For the first half of 2025, HSBC reported a headline profit before tax of $15.8 billion, down $5.7 billion year-on-year due to the BoCom charge . But on an adjusted basis excluding notable items, 1H25 pretax profit grew 5% to $18.9 billion, supported by higher net interest income and wealth management revenue. Revenue excluding notable items increased 6% to $35.4 billion .

Resumption of $1 Billion Share Buyback

HSBC announced the resumption of its share buyback program with an up to $1 billion plan . This is the bank's first repurchase since it paused its buyback program in October 2025 to fund the $13.6 billion take-private of the 36.5% of Hang Seng Bank it did not already own . The pause was expected to last approximately three quarters post-completion to rebuild capital levels .

CEO Elhedery's Overhaul: Cost Savings Ahead of Schedule

CEO Georges Elhedery, who took the helm in late 2024, has pushed forward a sweeping restructuring aimed at simplifying HSBC's structure. The bank has committed to $1.5 billion in annualized cost savings by the end of 2026, largely through cutting redundant senior roles . In 2025 alone, HSBC stripped out $1.2 billion in costs and reduced net Managing Director positions by approximately 15% . The bank now expects to achieve the full $1.5 billion annualized target by the end of June 2026, six months ahead of the original schedule, with total revamp-related expenses expected to reach $1.8 billion through 2026 .

Raised 2026 Net Interest Income Guidance

HSBC raised its net interest income (NII) guidance for 2026. The bank now expects NII to exceed $46 billion, compared with its previous guidance that NII would hit that level .

Interim Dividend

HSBC declared a $0.10 per share dividend for the second quarter of 2025, bringing the first-half total to $0.20 per share .

Expected Credit Losses and Hong Kong CRE Exposure

Credit quality was a notable area of pressure. HSBC reported a Q2 2025 expected credit loss (ECL) charge of $1.1 billion, up sharply from $346 million a year earlier . This included:

• $0.4 billion related to Hong Kong commercial real estate (CRE), reflecting model updates, stage 3 defaults, and downward pressure on non-residential rents and capital values .
• $0.2 billion tied to UK business credit normalization .

For the first half of 2025, total ECL reached $1.9 billion, representing a 40 basis point cost of risk . The Hongkong and Shanghai Banking Corporation, a key HSBC subsidiary, recorded HK$3.4 billion in ECL charges related to Hong Kong CRE in 1H25 .

HSBC's total CRE exposure in Hong Kong is approximately $32 billion, with about half linked to Hang Seng Bank . By mid-2025, 73% of HSBC's Hong Kong CRE loan book was classified as either impaired or bearing increased credit risk, up from less than 30% a year earlier . Management has stated that the downside risk is "well contained" and maintained a $500 million allowance covering a $1.4 billion segment of credit-impaired loans with loan-to-value ratios over 70% .