H1 2026
Filed Aug 4, 2026HSBC reported H1 2026 profit before tax of $19.5bn, up 23%, as revenue increased 11% to $37.7bn; it maintained its 2026 targets and announced a $0.10 per share second interim dividend and a share buy-back of up to $1bn.
Reported profit before tax increased by $3.7bn or 23% to $19.5bn, revenue increased by $3.6bn or 11% to $37.7bn, and annualised RoTE was 18.2%. The result included a $2.2bn year-on-year net favourable impact from notable items, while ECL rose to $2.4bn and the CET1 ratio fell to 14.1%.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenueother | $37,742m | – | 11% |
| Constant currency revenuenon-GAAP | $37,742m | – | – |
| Constant currency revenue excluding notable itemsnon-GAAP | $38,168m | – | – |
| Net interest incomeother | $18,233m | – | – |
| Banking net interest incomenon-GAAP | $22.9bn | – | – |
| Constant currency banking net interest incomenon-GAAP | $22,896m | – | – |
| Net interest marginother | 1.61% | – | 4bps |
| Net fee incomeother | $7,277m | – | – |
| Net income from financial instruments held for trading or managed on a fair value basisother | $10,520m | – | – |
| Net income from assets and liabilities of insurance businesses, including related derivatives, measured at fair value through profit or lossother | $6,105m | – | – |
| Insurance finance expenseother | $(5,838)m | – | – |
| Insurance service resultother | $1,033m | – | – |
| Net losses relating to sale of business operationsother | $(433)m | – | – |
| Other operating income/(expense)other | $845m | – | – |
| Expected credit losses and other credit impairment chargesother | $(2,353)m | – | – |
| Expected credit losses and other credit impairment charges (annualised) as % of average gross loans and advances to customers, including held for salenon-GAAP | 0.47% | – | – |
| Total operating expensesother | $(17,426)m | – | 2% |
| Target basis operating expensesnon-GAAP | $16,979m | – | 2% |
| Cost efficiency ratioother | 46.2% | – | – |
| Constant currency cost efficiency rationon-GAAP | 46.2% | – | – |
| Operating profitother | $17,963m | – | – |
| Share of profit in associates and joint ventures less impairmentother | $1,559m | – | – |
| Profit before taxother | $19,522m | – | 23% |
| Constant currency profit before tax excluding notable itemsnon-GAAP | $20,395m | – | – |
| Tax expenseother | $(4,201)m | – | – |
| Profit after taxother | $15,321m | – | 23% |
| Profit attributable to ordinary shareholders of the parent companyother | $14,626m | – | – |
| Basic earnings per ordinary shareother | $0.85 | – | – |
| Diluted earnings per ordinary shareother | $0.85 | – | – |
| Basic earnings per share excluding material notable items and related impactsnon-GAAP | $0.88 | – | – |
| Return on average ordinary shareholders' equity (annualised)other | 16.9% | – | – |
| Return on average tangible equity (annualised)other | 18.2% | – | – |
| Return on average tangible equity excluding notable items (annualised)non-GAAP | 19.1% | – | – |
| Total assetsother | $3,438,161m | – | – |
| Net loans and advances to customersother | $1,022,105m | – | – |
| Customer accountsother | $1,827,703m | – | – |
| Total shareholders' equityother | $196,682m | – | – |
| Cash and cash equivalents at the end of the periodother | $424,272m | – | – |
| Common equity tier 1 capital ratioother | 14.1% | – | – |
| Risk-weighted assetsother | $906,417m | – | – |
| Total capital ratioother | 19.7% | – | – |
| Leverage ratioother | 4.9% | – | – |
| High-quality liquid assets (liquidity value, average)other | $713,669m | – | – |
| Liquidity coverage ratio (average)other | 134% | – | – |
| Net cash from operating activitiesother | $81,762m | – | – |
| Net cash from investing activitiesother | $(63,402)m | – | – |
| Net cash from financing activitiesother | $(21,519)m | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Hong KongConstant currency net operating income before change in expected credit losses and other credit impairment charges was $8,132m; constant currency profit before tax was $5,138m compared with $4,511m. | $8,132m | – | – |
| UKConstant currency net operating income before change in expected credit losses and other credit impairment charges was $6,530m; constant currency profit before tax was $3,332m compared with $3,229m. | $6,530m | – | – |
| Corporate and Institutional BankingConstant currency net operating income before change in expected credit losses and other credit impairment charges was $15,609m; constant currency profit before tax was $7,250m compared with $6,805m. Revenue grew in Debt and Equity Markets and Wholesale Transaction Banking. | $15,609m | – | – |
| International Wealth and Premier BankingConstant currency net operating income before change in expected credit losses and other credit impairment charges was $7,739m; constant currency profit before tax was $2,616m compared with $2,136m. Wealth fee and other income growth was supported by higher customer activity. | $7,739m | – | – |
| Corporate CentreConstant currency net operating expense before change in expected credit losses and other credit impairment charges was $(268)m; constant currency profit before tax was $1,186m compared with a loss of $(680)m. | $(268)m | – | – |
2026 outlook
- Operating expensesyear-on-year growth in operating expenses of approximately 1% in 2026 on a target basis
- Notebanking NII of at least $46bn in 2026
- NoteECL charge as a percentage of average gross customer loans to be around 45bps (including held for sale loan balances) for 2026
- Notereturn on average tangible equity ('RoTE') of 17% or better for 2026, 2027 and 2028, excluding notable items
- Noteyear-on-year growth in revenue from 2026 to 2028, rising to 5% growth in 2028 compared with 2027, excluding notable items and on a constant currency basis
- Notedividend payout ratio target basis of 50% in 2026, 2027 and 2028
- NoteCET1 capital ratio within our medium-term target range of 14% to 14.5%
Capital returns
- The Board approved a second interim dividend of $0.10 per ordinary share.
- The second interim dividend amounts to approximately $1.72bn and will be payable on 25 September 2026.
- Dividend per ordinary share in respect of the period was $0.20, unchanged from $0.20.
- Dividends paid on ordinary shares were $9,416m, including a fourth interim dividend of $0.45 per ordinary share and a first interim dividend of $0.10 per ordinary share.
- HSBC intends to initiate a share buy-back of up to $1bn, expected to complete by its third quarter 2026 results announcement.
- Share buy-backs were nil in H1 2026, compared with $(5,386)m in H1 2025 cash flows.
What drove it
- Revenue growth reflected higher banking NII and strong growth in Wealth fee and other income in IWPB and Hong Kong, supported by higher customer activity.
- Banking NII increased by $1.6bn to $22.9bn, driven by deposit balance growth and reinvestment of the structural hedge at higher yields.
- Wholesale Transaction Banking increased by 4% on a constant currency basis and Wealth grew by 18% on a constant currency basis.
- Operating expenses increased with planned spend and investment in technology and inflation, partly offset by organisational simplification cost reductions.
- The reported year-on-year increase in profit before tax primarily reflected a $2.2bn net favourable impact from notable items.
Concerns
- ECL of $2.4bn were $0.4bn higher than in 1H25, including a $0.4bn fraud-related, secondary, securitisation exposure with a financial sponsor in the UK and $0.2bn related to the Hong Kong CRE sector.
- The CET1 capital ratio decreased by 0.8 percentage points from 31 December 2025, reflecting the Hang Seng Bank privatisation, dividends and higher RWAs.
- The outlook remains volatile and uncertain, according to HSBC's banking NII guidance commentary.
- HSBC recorded disposal losses of $0.3bn on classification to held for sale associated with the planned sale of its Malta business, restructuring costs of $0.3bn, and $0.2bn of foreign currency translation reserve losses following the UK life insurance sale.
- HSBC expects to incur $0.3bn in restructuring costs and write-offs related to the disposal and wind-down of HSBC Australia's retail banking operations.
What to watch
- Delivery of banking NII of at least $46bn in 2026 amid the interest-rate outlook and customer activity trends.
- The full-year ECL charge relative to HSBC's around 45bps 2026 expectation, particularly wholesale stage 3 exposures, Hong Kong CRE and Middle East-related uncertainty.
- Whether performance-related pay increases 2026 target basis cost growth modestly if strong business performance continues.
- CET1 capital management within the 14% to 14.5% medium-term range following the Hang Seng Bank privatisation, dividends, higher RWAs and the intended $1bn buy-back.
- Completion and earnings effects of planned business sales, including the expected estimated pre-tax gain on disposal of $1.8bn from the Singapore insurance business, expected in the first half of 2027.
Balance sheet and cash flow
- Customer lending balances increased by $34bn compared with 31 December 2025, including adverse foreign currency translation differences of $6bn. On a constant currency basis, lending balances increased by $40bn.
- Customer accounts increased by $41bn compared with 31 December 2025, including adverse foreign currency translation differences of $15bn. On a constant currency basis, customer accounts increased by $56bn.
- Customer lending increased by $20bn compared with 1Q26 on a reported basis.
- Customer accounts increased by $46bn compared with 1Q26 on a reported basis.
- Debt securities in issue were $105,027m at 30 Jun 2026, compared with $99,675m at 31 Dec 2025.
- Subordinated liabilities were $27,872m at 30 Jun 2026, compared with $28,406m at 31 Dec 2025.
- Total regulatory capital was $178,776m at 30 Jun 2026, compared with $182,371m at 31 Dec 2025.
- Cash and cash equivalents decreased by $(3,159)m during H1 2026.
Analysis
HSBC delivered a strong first half under IFRS Accounting Standards. Profit before tax increased by $3.7bn or 23% to $19.5bn, while profit after tax increased by $2.9bn or 23% to $15.3bn. Revenue increased by $3.6bn or 11% to $37.7bn. Annualised RoTE reached 18.2%, and annualised RoTE excluding notable items was 19.1%. Reported earnings growth benefited from a $2.2bn year-on-year net favourable impact from notable items, so the constant currency profit before tax excluding notable items increase to $20.4bn is an important measure of underlying progress.
The income mix improved through higher banking NII and fee income. Banking NII increased by $1.6bn to $22.9bn on deposit growth and structural-hedge reinvestment at higher yields. NIM increased 4bps to 1.61%. Wealth fee and other income grew strongly in IWPB and Hong Kong, with higher customer activity cited as the support. CIB also grew in Debt and Equity Markets and Wholesale Transaction Banking. Segment constant currency profit before tax rose in Hong Kong, UK, CIB and IWPB, while Corporate Centre moved from a loss of $(680)m to a profit of $1,186m.
Cost and credit trends are the principal offsets. Operating expenses increased 2% to $17.4bn, driven by technology investment, planned spending and inflation, although simplification savings partly mitigated these pressures. ECL rose to $2.4bn from $1.9bn, including a $0.4bn UK fraud-related secondary securitisation exposure, $0.2bn related to Hong Kong CRE, and allowances for uncertainty from the Middle East conflict. HSBC maintained its expectation for a 2026 ECL charge of around 45bps, above the reported H1 annualised measure of 0.47%.
Balance-sheet growth was led by customer activity, with lending up $34bn and customer accounts up $41bn from 31 December 2025 on a reported basis. The CET1 ratio declined to 14.1% from 14.9%, reflecting the Hang Seng Bank privatisation, dividends and higher RWAs, but remains within HSBC's 14% to 14.5% medium-term target range. The Board approved a $0.10 per ordinary share second interim dividend and intends to start a buy-back of up to $1bn. HSBC maintained its 2026 targets, including banking NII of at least $46bn, target basis operating-expense growth of approximately 1%, and RoTE of 17% or better excluding notable items.
Management, verbatim
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.
Georges Elhedery, Group CEO
Not in the filing
stated, not guessed- Gross margin was not reported.
- Free cash flow was not reported.
- A forward revenue amount was not reported.
- Forward gross-margin guidance was not reported.
- Forward tax-rate guidance was not reported.
- GAAP or IFRS earnings guidance was not reported.
- Detailed 2Q26 net interest income, NIM, EPS, cash flow and balance-sheet figures were not reported in the supplied text.
- Segment revenue as a separately labeled metric was not reported; segment entries use constant currency net operating income before change in expected credit losses and other credit impairment charges.
- A previous-release outlook section was not provided, so no comparison of actual results with prior guidance is included.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.