HSBC Holdings (00005) has announced its performance for 2025, with post-tax profits decreasing by $1.9 billion to $23.1 billion.

HSBC Holdings (00005) released its 2025 performance, with revenues increasing by $2.4 billion to $68.3 billion compared to 2024, representing a 4% increase; net interest income was $34.8 billion, up $2.1 billion from 2024; reported pre-tax profits decreased by $2.4 billion to $29.9 billion; post-tax profits decreased by $1.9 billion to $23.1 billion; basic earnings per share were $1.21, with a proposed fourth interim dividend of $0.45 per share. The announcement stated that the increase in revenues was mainly due to growth in wealth management business (from investment distribution and insurance) and wholesale banking business fees and other income, especially forex business in corporate and institutional wealth management business, although some of the growth was offset by the impact of notable items for the year, primarily related to divestment and dilution losses related to BANKCOMM. Excluding notable items, fixed exchange rate revenues increased by $3.4 billion to $71 billion. The increase in net interest income reflects the benefit of higher reinvestment rates in structurally hedged investments, deposit balance growth, and an increase in net interest income from capital markets finance business. Additionally, the growth includes the absence of a $0.2 billion loss from the early redemption of existing securities in 2024, but the divestment of Argentina and Canada businesses resulting in a $1.6 billion year-on-year adverse impact and pressure on deposit yield offset some of the growth. The $2.1 billion increase in net interest income also reflects a $1.7 billion benefit from lower funding costs related to transactional items. Net interest income from banking operations (excluding these funding costs) increased by $0.3 billion to $44.1 billion. Group Chief Executive Officer Alan Chan stated: "2025 was a year of decisive action and swift execution, reflected in our strong performance. The Group's four businesses performed well, with a strong overall growth trend. As a result, we have raised our targets for 2026 to 2028, with an average tangible equity return rate of 17% or higher each year, excluding notable items. We have also raised our revenue growth targets for the same period, aiming for 5% by 2028, excluding notable items. We are transforming into a streamlined, agile, and focused financial institution, to rapidly respond to customer needs and help them navigate the modern world. We are implementing growth and investing in resources, while steadfastly executing the Group's strategy, confident in our ability to continue delivering returns for shareholders." Financial objectives of the Group: - Our goal is to achieve an average tangible equity return rate of 17% or higher for 2026, 2027, and 2028, excluding notable items. This revised target reflects a growth trend in Group profitability and ideal progress in strategy execution. - We aim for annual revenue growth from 2026 to 2028, with a 5% increase in revenue by 2028 compared to 2027, excluding notable items and calculated at a fixed exchange rate. - The target dividend payout ratio for 2026, 2027, and 2028 will be maintained at 50%. Our target payout ratio is calculated as a percentage of earnings per share (excluding significant notable items and related impacts).