30th Jul 2025 06:22
(Alliance News) - HSBC Holdings PLC on Wednesday maintained its dividend and announced a new share buyback programme despite reporting a sharp drop in first half profit, as revenue slipped and margins narrowed.
HSBC is an Asia-focused, London-based universal bank and the second-largest FTSE 100 company by market capitalisation.
The bank said pretax profit fell 27% to USD15.81 billion in the six months ended June 30 from USD21.56 billion a year earlier. Diluted earnings per share fell to USD0.65 from USD0.88.
HSBC maintained its interim dividend at USD0.10 per share, but announced plans to initiate and complete a USD3 billion share buyback before its third quarter results are released.
The bank's common equity tier 1 ratio grew by 0.3 percentage points to 14.6% when compared with December 31.
Chief Executive Officer Georges Elhedery said: "We're making positive progress in becoming a simple, more agile, focused organisation built on our core strengths. In the first half, we continued to execute our strategy with discipline and each of our four businesses sustained momentum in their earnings with each growing revenue. This gives us confidence in our ability to deliver our targets. We continue to navigate this period of economic uncertainty and market volatility from a position of strength, putting the changing needs of our customers at the heart of everything we do."
Revenue declined 8.5% to USD34.12 billion in the first half from USD37.29 billion in the previous year, while total operating expenses increased by 4.5% to USD17.02 billion from USD16.30 billion.
Net interest income fell 0.5% to USD16.82 billion from USD16.91 billion, as net fee income rose 7.1% to USD6.64 billion from USD6.20 billion.
The bank's net interest margin declined to 1.57% from 1.62%, with the change primarily attributed to an adverse impact from foreign currency translation differences and the disposal of its business in Argentina.
"We continue to expect demand for lending to remain muted during 2025. However, over the medium to long term we expect mid-single digit percentage growth for year-on-year customer lending balances," HSBC said. "We intend to manage the CET1 capital ratio within our medium-term target range of 14% to 14.5%, with a dividend payout ratio target basis of 50% for 2025, excluding material notable items and related impacts."
HSBC shares closed 1.2% higher at 971.60 pence in London on Tuesday.
By Elijah Dale, Alliance News senior reporter Asia-Pacific
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