Europe’s largest bank posted a pretax profit of USD 19.5 billion for the first six months of this year, up 23% from USD 15.8 billion seen in H1 2025 and ahead of the analysts’ estimates of USD 18.9 billion.

HSBC’s solid performance now stands as the testimony of its Asian focus, where an overhaul targeting wealth and cross-border banking drove fee income growth alongside a favourable rate backdrop.

“HSBC is becoming the stronger bank we set out to build. We are executing our strategic priorities with pace, precision and discipline. This is allowing our four businesses to focus on their core strengths, grow, work together more effectively and deepen customer relationships. The result is a bank capable of achieving more,” said Georges Elhedery, Group CEO.

The 23% increase in pretax profit primarily reflected a year-on-year net favourable impact of USD 2.2 billion from notable items.

“The increase also reflected growth in banking net interest income (banking NII) and higher fees and other income, primarily in Wealth and Wholesale Transaction Banking (WTB). This was partly offset by higher expected credit losses and other credit impairment charges (ECL) and a planned increase in operating expenses. Profit after tax of USD 15.3 billion was USD 2.9 billion, or 23% higher compared with H1 2025,” HSBC said.

HSBC’s wealth revenue in the first half grew 18% from a year ago, backed by strong growth from its Asian markets. Rival Standard Chartered also announced a forecast-beating first-half profit last week, powered ⁠by a push for fee income.

Despite a wealth crackdown launched by Beijing in May aimed at restricting illegal cross-border flows, account-opening activity remained largely unaffected, Elhedery said during the earnings briefing.

“Hong Kong remains front and centre in the growth of our wealth business in Asia. It is evidenced ⁠by the 640,000 new clients the banking group acquired in the first six months in the market across HSBC and Hang Seng brands,” he added further.

HSBC’s strong H1 performance also concludes a strong earnings season for Europe’s big banks, which have extended a more ⁠than two-year-long recovery thanks to a surge in trading activity and resilient interest income despite dips in central bank rates.

HSBC also lifted its guidance for net interest income for the 2026/27 year. The British financial biggie now expects to exceed USD 46 billion, having previously said it would hit that level.

The lender announced a resumption of its share buybacks with an up to USD 1 billion plan, after pausing them when it announced late 2025 it was taking smaller Hong Kong lender Hang Seng Bank private.

The British multinational also set a second interim dividend of USD 0.1 per share, following a USD 0.1 payout in May.

As HSBC focuses on the Asia region, it has also streamlined its organisation by exiting markets where it lacks scale. In Singapore, it sold its insurance business. In Egypt and Australia, the venture has divested its retail banking and mortgage undertakings.

HSBC’s corporate and institutional banking business also received a further boost from the rising need to serve cross-border clients. The division has become the bank’s ⁠biggest income earner, accounting for a third of the first-half profit.

The bank, which is no longer active in the most buoyant American dealmaking market after earlier exits, has more than 70 initial public offerings (IPOs) lined up in Asia, 40 of which are in Hong Kong, Elhedery told the investors and analysts.

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The tie-up marks the latest step ‌in HSBC CEO Georges Elhedery’s drive to embrace the AI’s revenue-generating and cost-savings-related capabilities that can process vast amounts of data, apart from automating tasks previously done by people.

The partnership, which HSBC said will focus on areas such as advice for wealth ⁠management clients and financial crime risk management, shows how banks globally are accelerating their AI adoption, as the financial sector emerges as the next tech battlefield, with companies competing in a technology arms race with each other.

“This new collaboration will further accelerate the shift towards AI-enabled ways of working across HSBC’s global operations. HSBC will work with Google Cloud and Google DeepMind engineering teams to collaborate on new AI-powered tools and programs, with access to Google’s latest agentic AI capabilities, including Gemini models and the Gemini Enterprise Agent Platform,” HSBC said while announcing the tie-up.

As per the HSBC, a partnership with Google Cloud should enable 200 more tasks using AI over the next two years. The partnership-related announcement also comes after Elhedery’s comment in May 2026, in which he urged the staff to embrace AI while issuing a warning about technology “destroying certain jobs and creating new ones.”

Google ⁠Cloud and Google DeepMind engineering teams will help HSBC in identifying priority projects that could each deliver more than USD 100 million in revenue gains or efficiency improvements.

While HSBC will get access to Google’s Gemini model, it is worth mentioning that the bank is already running 600 of its digital applications ⁠on Google Cloud.

“The project will target three main areas: personalized wealth management support, financial crime risk management, and AI-empowered decision-making for frontline staff to ⁠reduce time spent on administration and meeting preparation,” HSBC added further.

“AI is becoming one of the defining technologies of our time, allowing us to create a personalized experience for each customer, delivered in real time and at scale, while keeping human judgment, decision-making, and accountability at the core. A partnership like this one with Google Cloud helps us empower our colleagues with the tools they need to be future-ready and supports our work in building a simple, agile, faster, and more personal HSBC,” Elhedery remarked.

“Our partnership with HSBC is a blueprint for the future of the financial services industry. By accelerating AI adoption built with Gemini, our Gemini Enterprise Agent Platform, forward-deployed engineers, and Google DeepMind’s research expertise, HSBC is building a more intelligent, resilient, and responsive bank that can create meaningful value for its customers,” said Thomas Kurian, CEO of Google Cloud.

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After almost five years in charge, Quinn’s departure from HSBC was abruptly announced in late April. Georges Elhedery’s appointment as CEO, on the other hand, comes less than two years after he was promoted to CFO in January 2023.

According to a statement from the company, he will carry on in his role as group CFO during the transition. His appointment comes as the bank tries to shift from restructuring to growth, at a time when helpful interest rate hikes may have peaked and geopolitical tensions simmer.

Iain Pyle, senior investment director at HSBC shareholder Abrdn, told Reuters that Georges Elhedery had made a good impression on the market over his 18 months as the CFO, and was “a clear communicator”.

“It’s a continuity appointment, but a strong candidate and I think will be taken well today,” he said.

HSBC defeated a resolution in 2023 backed by Chinese insurance giant Ping An and other Hong Kong-based shareholders who were seeking a spin-off of its lucrative Asia business.

Meet Georges Elhedery: A Proven Performer

In 2005, Georges Elhedery joined HSBC. Until January 2023, he served as co-CEO of Global Banking and Markets at HSBC. He then assumed the position of chief financial officer. Apart from this, from July 2016 to February 2019, he oversaw the bank’s operations in Turkey, North Africa, and the Middle East.

After that, he was the co-head of the Global Banking and Markets business, the division that houses HSBC’s trading and investment banking advisory businesses, and accounted for 24% of the group’s revenues in 2023.

HDBC Chairman Mark Tucker stated that Georges Elhedery has a proven track record of leading through change, driving growth, delivering simplification, controlling costs, and bringing a strong focus on execution.

In October 2022, he was unexpectedly appointed CFO, just weeks after returning from a sabbatical, a move that groomed him for the top job.

“I am deeply honoured by the trust placed in me to lead this great institution into the future. Working together with our talented team, I look forward to delivering exceptional value to our clients and investors by driving strong performance on a sustainable growth trajectory,” Georges Elhedery told the media, while reacting upon his promotion as the HSBC CEO.

Quinn, who led HSBC for five years, will remain CEO until Georges Elhedery starts in the role. At the time of his surprise exit announcement in April 2024, he had said he wanted a better work-life balance and planned to pursue a portfolio career. Quinn oversaw a raft of asset sales, navigated a global pandemic and the push by rebel investors to break up the bank, guiding the lender to record profit.

Challenges Await New HSBC CEO

HSBC made a record profit of USD 30 billion in 2023 thanks to two years of interest rate hikes during the global inflation fight. The bank makes more money when it can lend at higher rates than it pays on its USD 1.7 trillion base of deposits.

Half of HSBC’s revenue comes from net interest income, which increased by USD 5.04 billion to almost USD 36 billion in 2023. However, as central banks lower rates, analyst forecasts indicate that it will return to USD 33 billion this year and in 2025.

“For HSBC, like many banks, a key reason for the sub-par valuation is an inherent scepticism around the sustainability of earnings as interest rates come off their peak. Demonstrating the alternative growth levers that can be pulled will be a key to support a re-rating going forward,” Benjie Creelan Sandford, financial equity portfolio manager at Algebris Investments, which holds HSBC shares, said.

If interest-based revenue declines, HSBC will be under more pressure to increase revenue from fee-based services like wealth management. According to the bank’s wealth head Nuno Matos, in a June 2024 investor presentation, net new invested assets rose by 6% to USD 84 billion in 2023, with a 7% gain in wealth revenue from Asia.

In addition to expanding its onshore private banking presence, the bank has invested billions in joint ventures involving securities and insurance in China. Executives said that the company is on track to meet a target of 3,000 wealth managers by 2025, having hired about 1,700 of them in China since 2021.

In China, however, HSBC’s wealth and personal banking division reported an operating loss of USD 90 million for 2023. The wealth pool is predicted to increase much more slowly even as Beijing continues its “common prosperity” campaign to narrow the growing wealth gap in the world’s second-largest economy.

Similarly in its early stages is a plan by the European head of HSBC to focus on inbound expansion by Asian corporate clients. HSBC is particularly vulnerable to deteriorating ties between China and the West because more than half of its yearly profit comes from Hong Kong and Britain. Although it is looking into ways to fully take over its Chinese fund management unit, there are worries Beijing won’t approve it until its tensions with Washington subside.

HSBC’s business model is based on robust international trade flows and increased cross-selling between its regional offices; it fiercely defended this approach in response to demands for a split from its largest shareholder. Even though it is considering reducing its position, the Chinese investor still owns an 8.9% stake in the bank and could cause more issues, according to media reports.

The ongoing bad loan crisis in China, which resulted in a shocking USD 3 billion impairment charge on HSBC’s ownership of Bank of Communications (BoCom) in February 2024, will also be Georges Elhedery’s responsibility to manage. It has been suggested that the indebted property sector in China has peaked, but in May 2024, house prices dropped at the quickest rate in almost ten years.

At the end of 2023, BoCom’s non-performing loan ratio for real estate lending was 4.49%, up from 2.8% at the end of 2022. In general, weaker markets and a slowing Chinese economy have affected HSBC’s performance in Asia. It reported a USD 24 billion decline in assets in the first quarter of this year across Asian customer accounts, primarily at its Hong Kong-based legal entity.

The bank stated that certain customers’ risk aversion and competitive pressures in its commercial, wealth, and international markets businesses were the causes of the decline.

Georges Elhedery has relatively little direct work experience in Asia, having spent the bulk of his HSBC career in roles across its Middle East and Africa businesses, but did learn Mandarin during his six-month sabbatical, according to sources at the bank and media reports.

HSBC, which marketed itself as “the world’s local bank,” has shrunk its empire by selling assets in markets like the United States, France, and Canada. However, some believe that more work needs to be done.

“I think it’s the question of whether the geographical divestments HSBC has already completed…are enough for it to maximise its medium-term returns,” Mike Makdad, senior equity analyst at Morningstar said.

Makdad stated that although global bank capital requirements have been gradually tightened since the 2008 financial crisis, the business model of a multinational bank with retail operations across multiple nations has grown increasingly complex, and HSBC’s profitability is still heavily biased towards Hong Kong.

“So the question for the new CEO is: what kind of bank should HSBC be so that the combination of parts generates the best synergies?” he said.

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