HSBC Holdings announced its 2025 financial performance, showing a revenue increase of $4 billion to $68.3 billion compared to 2024, representing a 4% growth. Net interest income reached $34.8 billion, up by $2.1 billion from the previous year. However, pre-tax profit on a reported basis decreased by $2.4 billion to $29.9 billion, while post-tax profit declined by $1.9 billion to $23.1 billion. Basic earnings per share stood at $1.21, with a proposed fourth interim dividend of $0.45 per share.
The revenue growth was primarily driven by higher fees and other income from wealth management operations, including investment distribution and insurance, as well as wholesale transaction banking services. Particularly strong performance was noted in foreign exchange activities within corporate and institutional banking. These gains were partially offset by notable items, mainly related to business disposals and dilution losses associated with Bank of Communications. Excluding notable items and at constant currency rates, revenue increased by $3.4 billion to $71 billion.
The improvement in net interest income reflected benefits from reinvesting structural hedges at higher yields, growth in deposit balances, and increased net interest income from capital markets treasury activities. Additionally, the absence of a $200 million loss from early redemption of existing securities in 2024 contributed to the increase. These positive factors were partially counteracted by a $1.6 billion unfavorable year-on-year impact from the disposal of Argentina and Canada operations, along with pressure on deposit yields. The $2.1 billion rise in net interest income also included a $1.7 billion benefit from reduced funding costs in trading books. Banking net interest income, excluding these funding costs, increased by $300 million to $44.1 billion.
Group Chief Executive Noel Quinn stated, "2025 was a year of decisive action and strong execution, reflected in our robust performance. All four of our core businesses performed well, demonstrating solid growth momentum. Consequently, we have raised our targets for 2026-2028, increasing the average annual return on tangible equity excluding notable items to 17% or higher. We have also elevated our year-on-year revenue growth target excluding notable items for the same period, aiming to achieve 5% growth by 2028. We are transforming into a simpler, more agile, and focused financial institution capable of responding quickly to client needs and helping them navigate the modern world. We are implementing growth strategies with appropriate resource allocation while maintaining disciplined execution of our group strategy, confident in our ability to deliver sustainable returns for shareholders."
The group's financial targets include achieving an average return on tangible equity of 17% or higher for 2026, 2027, and 2028, excluding notable items. This revised target reflects the company's improving profitability trend and satisfactory progress in strategy implementation. The bank aims for year-on-year revenue growth during 2026-2028, targeting 5% growth in 2028 compared to 2027, excluding notable items and calculated at constant exchange rates. The dividend payout ratio target remains at 50% for 2026, 2027, and 2028, calculated as a percentage of earnings per share excluding significant notable items and related impacts.
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