HSBC Holdings (00005) reported robust interim results for 2Q 2026, underscored by double-digit profit growth, firm balance-sheet expansion and an upgraded outlook for full-year net interest income (NII).

Revenue and Profitability • Revenue excluding notable items rose 7% year on year to USD 19.00 billion, propelled by higher net interest income and solid fee generation across Wealth and Wholesale Transaction Banking. • Profit before tax (PBT) excluding notable items increased 13% to USD 10.30 billion. Reported PBT surged 63% to USD 10.10 billion, aided by lower costs and a USD 1.0 billion swing in associate contributions. • Annualised return on tangible equity (RoTE) improved to 19.5%, versus 18.7% in 1Q 2026 and 17.8% in 2Q 2025.

Balance-Sheet Momentum • Customer deposits grew USD 46 billion quarter on quarter to USD 1.83 trillion (+8% year on year); loan balances rose USD 20 billion sequentially to USD 1.02 trillion (+5% year on year). • The Common Equity Tier 1 ratio edged up 10 basis points to 14.1%, after absorbing a 50 basis-point dividend accrual and 30 basis-points of RWA growth tied to lending expansion.

Segment Performance • All four core businesses—Hong Kong, UK, Corporate & Institutional Banking (CIB) and International Wealth & Premier Banking (IWPB)—reported revenue growth and delivered at least 17% annualised RoTE. • CIB deposits climbed USD 92 billion year on year; Hong Kong and UK franchises added USD 28 billion and USD 12 billion in deposits respectively. • Wealth fee and other income advanced 21% year on year to USD 2.80 billion, supported by double-digit gains in insurance, private banking and investment distribution.

Cost and Credit Trends • Target-basis operating costs rose 1% year on year in 2Q 2026, aligned with the full-year guidance of ~1% growth. HSBC has increased its simplification savings target to about USD 2.00 billion by end-2026, with USD 1.70 billion already actioned. • Expected credit loss (ECL) charges remained stable at USD 1.10 billion, equal to an annualised 41 bps of average loans. Full-year ECL guidance is maintained at approximately 45 bps.

Capital Returns • The board declared a second-quarter dividend of USD 0.10 per share, taking first-half dividends to USD 0.20 per share. • A new share-buyback programme of up to USD 1 billion was announced, lifting total capital returned since 3Q 2024 to USD 37 billion.

Updated 2026 Guidance and Medium-Term Targets • Banking NII forecast for FY 2026 was revised up to at least USD 46 billion, reflecting “continued favourable, though volatile, rate outlook.” • Management reiterated medium-term goals: revenue growth rising to 5% per year by 2028, RoTE of 17% or higher each year, and a dividend payout ratio of 50% of earnings (excluding material notable items). • CET1 ratio is expected to be managed within the 14.0%–14.5% range.

Strategic Progress • Organisational simplification has reduced managing-director roles by about 15% since 2024. • The bank is advancing exits from non-strategic operations, including announced sales of Singapore Insurance, Australia retail banking and Egypt retail banking. • Targeted cost reallocations of roughly USD 1.80 billion will fund growth initiatives, while the Hang Seng Bank privatisation is on track to deliver USD 0.30 billion in cost synergies by year-end 2028.

HSBC will brief investors and analysts via Zoom today, with Group CFO Pam Kaur presenting the results. Replay details are available on the company’s investor relations website.