HSBC Q1 Profit Miss as Revenue Rises
HSBC Q1 profit miss as higher provisions after a UK fraud charge and Mideast conflict offset revenue; bank raised NII guidance to $46 billion and lifted credit charge, denting ties
KEY TAKEAWAYS
- Bank raised full-year net interest income guidance to about $46 billion and lifted credit-charge outlook to 45 bps.
- Q1 pretax profit was $9.4 billion, flat year-on-year and below $9.59 billion broker consensus.
- Revenue rose about 6% to roughly $18.6 billion but higher provisions offset gains.
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HSBC Holdings plc reported flat first-quarter pretax profit on May 5, 2026, as higher provisions related to a UK fraud case and the Middle East conflict offset revenue growth. The bank raised its net interest income guidance while increasing its expected credit-charge outlook.
First-Quarter Results
Pretax profit for the quarter ended March 2026 was $9.4 billion, essentially unchanged from $9.5 billion a year earlier and below the $9.59 billion broker consensus. The shortfall reflected charges and provisions that offset steady operating performance, leaving reported profit below expectations.
Revenue rose about 6.0% to roughly $18.6 billion, up from $17.6 billion a year earlier, meeting or slightly exceeding forecasts. However, this top-line gain did not translate into higher pretax income after accounting for the quarter’s loss items.
Expected credit losses totaled $1.3 billion, up $400 million year-on-year. The bank also recorded a $400 million investment-banking charge tied to a UK fraud case. Management attributed the rise in provisions and the investment-banking loss to exposures related to about $3.0 billion of UK loans and to provisions connected with the Middle East conflict. These items were the main drivers of the profit miss despite revenue growth.
Guidance and Market Reaction
HSBC raised its full-year 2026 net interest income guidance to about $46 billion and increased its expected credit-charge outlook to 45 basis points of average gross loans, up from 40 basis points. The bank maintained its medium-term return on tangible equity target of 17% or better, signaling confidence in achieving longer-run profitability despite near-term provisioning pressures.
Shares in Hong Kong fell about 4% after the results, reflecting investor concern over the scale and causes of the quarter’s charges. Management described macroeconomic conditions as volatile alongside the revisions to income and credit outlooks. The combination of higher net interest income guidance and increased credit-charge expectations suggests a mixed near-term outlook, with margin support from rising net interest income offset by growing asset-quality costs.
