HSBC has reported a sharper-than-expected fall in profits, weighed down by multi-billion-dollar charges linked to its Chinese operations. According to Times UK, Europe’s largest bank saw its pre-tax profits tumble by 26.7% in the first half of 2025, down to $15.8 billion — a significant setback amid its ongoing corporate overhaul.
The Asia-focused lender was hit particularly hard by a $2.1 billion write-down on its investment in the Shanghai-based Bank of Communications. It also recorded $1.9 billion in impairments for expected credit losses, including exposure to struggling segments of Hong Kong’s commercial real estate sector. This brought its total loan impairment charges to $900 million higher than the same period last year.
The poor results mark a blow for HSBC Group CEO Georges Elhedery, who assumed leadership last September following a tenure as the bank’s finance chief. Elhedery is spearheading an ambitious restructuring plan that includes major job cuts and a goal of $1.5 billion in annual cost savings.
While headquartered in London, HSBC retains deep ties to Asia, particularly China and Hong Kong. Its exposure to the region has left it vulnerable to the ongoing downturn in the Chinese property market and mounting trade tensions between the U.S. and China — a dynamic that has intensified since Donald Trump’s return to the White House earlier this year.
The bank also issued a warning that broader macroeconomic challenges, including newly imposed U.S. tariffs, could derail its long-term profitability targets, particularly its return on tangible equity goals.
In a move to reassure investors, HSBC announced a $3 billion share buyback alongside a 10 cent interim dividend. However, the market reaction was cool; the bank’s shares dropped by 40p, or 4%, to 930p following the announcement.
Times UK, which first reported the earnings data, noted that despite the disappointing results, HSBC is pressing ahead with its transformation strategy amid mounting global uncertainty.
