HSBC profit jumps 23% to $15.3b

The lender plans a $1b share buy-back before releasing its third-quarter results.

HSBC Holding’s first half 2026 (H1 2026) profit after tax jumped 23% year-on-year (YoY) to $15.3b, driven by higher net interest income and stronger fee income from its wealth and transaction banking businesses, as the lender announced a second interim dividend and plans for a new share buy-back.

The board approved a second interim dividend of $0.10 per share and said it intends to launch a share buy-back of up to $1b, which is expected to be completed before the release of its third-quarter 2026 results.

Revenue climbed 11% year on year to $37.7b, supported by higher banking net interest income and stronger wealth-related fee income, particularly in its International Wealth and Premier Banking and Hong Kong businesses, reflecting increased customer activity.

Banking net interest income rose by $1.6b to $22.9b, whilst net interest margin improved by four basis points to 1.61%.

HSBC said deposit growth and higher returns from reinvesting its structural hedge more than offset the impact of lower market interest rates.

Expected credit losses (ECL) increased to $2.4b from $2b a year earlier. 

The charge included a $0.4b fraud-related secondary securitisation exposure in the UK corporate and institutional banking business, $0.2b linked to Hong Kong commercial real estate, and additional allowances related to the conflict in the Middle East.

Operating expenses rose 2% to $17.4b, reflecting higher investment in technology and inflation, although cost savings from the bank's organisational restructuring helped offset part of the increase.

Customer lending increased by $40b on a constant currency basis compared with the end of 2025, whilst customer deposits grew by $56b, led by growth in corporate and institutional banking.

Group CEO Georges Elhedery said the bank was making progress on its strategic priorities, with its simplified structure allowing its four businesses to focus on their core strengths, strengthen customer relationships and support further growth.