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HSBC Profits Plunge 26% as China Investments Weigh
30 Jul
Summary
- HSBC reports 26% drop in first-half pretax profit
- Losses from Bank of Communications stake and Hong Kong real estate exposure
- CEO Georges Elhedery reviews retail operations in Australia, Indonesia, and Sri Lanka
In the first half of 2025, HSBC Holdings reported a 26% slide in pretax profit, missing analyst estimates. The sharp decline was due to impairments from the bank's investment in China's Bank of Communications and exposure to Hong Kong's troubled real estate sector.
The challenges faced by HSBC underscore the difficulties for CEO Georges Elhedery, who has been leading a sweeping restructuring at the bank. As part of the restructuring, Elhedery said the bank had started reviews of its retail banking operations in Australia, Indonesia, and Sri Lanka, following the sale of its Bangladesh retail business.
Despite posting a $15.8 billion profit for the first six months of 2025, HSBC's Hong Kong-listed shares dropped more than 3% after the results were announced. The bank also expects to recognize a $1.4 billion loss in the fourth quarter of 2025 when it completes the sale of a mortgage portfolio in France.
HSBC's corporate and institutional banking business, its biggest revenue earner, was the only division that saw a profit increase, up 4% from the same period last year. However, the bank's overall performance was weighed down by its exposure to China and Hong Kong, where the property market has been in a multi-year tailspin.
