3Q 2025 update

“We are becoming a simple, more agile, focused bank, built on our core strengths. The intent with which we are executing our strategy is reflected in our performance this quarter, despite taking legal provisions related to historical matters.

“The positive progress we are making gives us confidence in our ability to upgrade our targets and we now expect 2025 RoTE excluding notable items to be mid-teens, or better.

“We remain fully focused on helping our customers navigate new economic realities, putting their changing needs at the heart of everything we do.“

Georges Elhedery, HSBC Group CEO
28 October 2025

We expect to deliver a mid-teens or better RoTE for 2025, excluding notable items. This reflects sustained momentum in the earnings of our four businesses and the positive progress we’re making in our strategic execution. We maintain confidence in our ability to deliver our mid-teens RoTE target, excluding notable items, for 2026 and 2027.

We now expect banking NII of $43bn or better in 2025, reflecting increased confidence in the near-term trajectory for policy rates in key markets, including in Hong Kong and the UK.

We continue to expect ECL charges (expected credit losses and other credit impairment charges) as a percentage of average gross loans to be around 40bps in 2025 (including loans held for sale balances).

Target basis operating expense growth in 2025, compared with 2024, remains at approximately 3%, including the impact of simplification-related saves associated with our announced reorganisation.

We maintain our medium-term common equity tier 1 capital ratio (CET1) target range of 14% to 14.5% (see ‘context behind the numbers’ below), with a dividend payout ratio target basis of 50% for 2025, excluding material notable items and related impacts.

Higher revenue was more than offset by an increase in operating expenses, mainly from notable items in 3Q25. This includes legal provisions of $1.4bn on historical matters, comprising $1.1bn in connection with developments in a claim in Luxembourg relating to the Madoff securities fraud, and $0.3bn relating to certain historical trading activities in HSBC Bank plc.

There were also restructuring and other related costs associated with our organisational simplification of $0.2bn. The increase in operating expenses also reflected higher planned spend and investment in technology.

On 9 October 2025, we put forward a conditional proposal to privatise Hang Seng Bank. The expected day one capital impact of the proposal on our CET1 capital ratio is a net reduction of approximately 125 basis points, which would be recognised following the approval of the relevant resolutions by the requisite majority at each of the Hang Seng Bank Court Meeting and the Hang Seng Bank General Meeting.

While our CET1 capital may fall below our target operating range of 14.0% to 14.5% on recognition of the day one capital impact, we expect to restore our capital to within this range through a combination of organic capital generation and the decision not to initiate buybacks. A decision to recommence buybacks will be subject to our normal buyback considerations and process on a quarterly basis.