London, Feb 25, 2026, 11:04 GMT — Regular session
HSBC Holdings (HSBA.L) climbed 69.2 pence to 1,361 pence by 10:35 GMT, up 5.4%, as the bank raised a major profitability target with its annual results. Shares in its Hong Kong listing traded higher as well.
The update arrives as HSBC shares trade near highs, fueled by last year’s rally. European bank investors are zeroing in on a key question: will hefty buybacks and robust returns hold up if rates slip and China-related credit issues persist?
HSBC is aiming for a return on tangible equity (RoTE) of “17% or better” annually from 2026 through 2028, sticking to a closely watched profitability benchmark for banks. CEO Georges Elhedery called 2025 “a year of decisive action and swift execution.” HSBC
HSBC’s results summary showed profit before tax, stripped of “notable items,” climbing 7% to $36.6 billion in 2025. Reported profit before tax, though, slipped 7% to $29.9 billion. The lender signed off on a fourth quarterly dividend of $0.45 a share, bringing the full-year payout for 2025 to $0.75. For 2026, it’s forecasting banking net interest income (NII) of at least $45 billion. Expected credit losses (ECL) are set at about 40 basis points—equal to 0.40 percentage point—with the CET1 capital ratio landing at 14.9%, a key balance-sheet metric. HSBC
HSBC’s profit slide came after $4.9 billion in one-off charges, Reuters said—most notably a $2.1 billion write-off on its China’s Bank of Communications stake and $1.4 billion set aside for legal issues. The bank is targeting $900 million in pretax revenue and cost synergies with Hang Seng Bank by end-2028, and expects to incur about $600 million in restructuring costs.
HSBC’s drive for simplification has picked up pace, with the bank now anticipating it will reach its $1.5 billion cost-savings target in the first half of 2026—half a year sooner than originally outlined, according to the Financial Times.
HSBC’s surge spilled over to the rest of Europe’s banks, sparking fresh buying across the sector. Banking shares climbed more than 1.7%, helping the STOXX 600 notch a record high Wednesday, according to Reuters. Stronger results and new targets from HSBC set the tone for the move.
Barclays analyst Aman Rakkar is sticking with his “Buy” call on HSBC, setting the price target at 1,400 pence, per MarketScreener. MarketScreener
Still, plenty of risk lingers. HSBC’s profits remain exposed to credit issues linked with property in Hong Kong and mainland China. Investors will want to see if the bank can really stick to its strict cost targets, especially as spending on tech and compliance continues to climb.
Capital remains a key watchpoint. Management has indicated buybacks are on hold until the CET1 ratio returns to the medium-term target band, leaving the timing of shareholder returns uncertain for now.
Attention now turns to HSBC’s dividend schedule. The bank has shares set to go ex-dividend on March 12 across London, Hong Kong, and Bermuda. Payout lands on April 30.
