HSBC has warned that lending will "remain muted" for the rest of 2025 after posting disappointing profits for the first half of the year. The banking giant's profit before tax fell by £4.3 billion compared to the same period in 2024, dropping to £11.8 billion.
The bank attributed £2.7 billion of the decline to selling its operations in Argentina and Canada. Additional losses of £1.6 billion came from "dilution and impairment losses" related to Bank of Communications.
Profits drop by 30%
Profit after tax plummeted by 30% year on year to £9.3 billion. However, when excluding notable items and using constant currency, profit before tax actually increased by £674 million to £14.2 billion.
HSBC highlighted strong performance in its international wealth and premier banking divisions, as well as its Hong Kong business segments. Revenue fell by £2.4 billion to £25.5 billion, largely reflecting the disposal of Canadian and Argentinian operations.
Economic uncertainty weighs
The bank said its first-half results "included allowances to reflect heightened uncertainty and a deterioration in the forward economic outlook due to geopolitical tensions and higher trade tariffs". Higher spending on technology investment also impacted the figures.
HSBC stated it remains "well-positioned to manage the changes and uncertainties prevalent within the global environment". The bank has modelled scenarios including "significant reductions in policy rates, together with broader macroeconomic deterioration" under disruptive tariff conditions.
Cost targets maintained
The group confirmed it remains on track to deliver its cost target, with growth in operating expenses expected to be approximately 3% in 2025 compared to 2024. This target includes savings from simplification measures associated with the bank's announced reorganisation.
Georges Elhedery, HSBC Group chief executive, said the bank was "making positive progress in becoming a simple, more agile, focused organisation built on our core strengths". He added that each of the bank's four businesses sustained momentum in earnings with revenue growth across all divisions.
(PA/London) Note: This article has been edited with the help of Artificial Intelligence.
