Revenue growth in lending, along with robust money flows through the wealth management fee earnings, helped HSBC Holdings report a better-than-expected first-half profit, as the venture raised its net interest income target for the remainder of the 2026/27 financial year.
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.