London, Feb 25, 2026, 11:04 GMT — Regular session
HSBC Holdings (HSBA.L) shares rose 69.2 pence, or 5.4%, to 1,361 pence by 10:35 GMT, after the bank lifted a key profitability target alongside its annual results. The lender’s Hong Kong listing was also higher. (HSBC)
The update lands with HSBC stock already heavily bid, after a strong run last year, and with European bank investors drilling into one question: can big buybacks and high returns survive a softer rate backdrop and messy China-linked credit?
HSBC said it was now targeting a return on tangible equity (RoTE) of “17% or better” for each year from 2026 to 2028. RoTE is a common bank yardstick for profit returns on shareholder capital. “2025 was a year of decisive action and swift execution,” CEO Georges Elhedery said. (HSBC)
In a results summary, HSBC said profit before tax excluding “notable items” rose 7% to $36.6 billion in 2025, while reported profit before tax was 7% lower at $29.9 billion. The bank approved a fourth quarterly dividend of $0.45 per share, taking the 2025 total to $0.75, and flagged 2026 banking net interest income (NII) of at least $45 billion. It also guided for expected credit losses (ECL) around 40 basis points — 40 bps is 0.40 percentage point — and put its CET1 capital ratio, a key measure of bank balance-sheet strength, at 14.9%. (HSBC)
The reported profit decline reflected $4.9 billion in one-off charges, including a $2.1 billion write-off tied to its stake in China’s Bank of Communications and $1.4 billion in legal provisions, Reuters reported. HSBC also pointed to $900 million in targeted pretax revenue and cost synergies by end-2028 from its Hang Seng Bank tie-up, alongside about $600 million in restructuring costs. (Reuters)
HSBC has also been pushing simplification harder than planned. It expects to hit a $1.5 billion cost-savings goal in the first half of 2026, six months ahead of schedule, the Financial Times reported. (Financial Times)
The rally in HSBC fed into a broader bid for European banks. The STOXX 600 index hit a record on Wednesday, with banking stocks up more than 1.7% as HSBC’s stronger-than-expected numbers and raised targets lifted the sector, Reuters reported. (Reuters)
On the broker side, Barclays analyst Aman Rakkar kept a “Buy” rating on HSBC with a target price of 1,400 pence, according to MarketScreener. (MarketScreener)
But the downside case has not gone away. HSBC’s earnings are still sensitive to credit wobbles tied to Hong Kong and mainland China property, and investors are likely to test whether tight cost guidance holds up as banks spend more on technology and compliance.
Another watchpoint is capital. Management has signaled it will not restart buybacks until its CET1 ratio is back within its medium-term target range, which keeps the timetable for shareholder returns in play.
Next up, traders will focus on the dividend timeline: HSBC said shares are due to trade ex-dividend in London, Hong Kong and Bermuda on March 12, with payment scheduled for April 30. (HSBC)
