Q1 2025 HSBC Holdings PLC Earnings Call Transcript
Key Points
- HSBC Holdings PLC (HSBC) reported a strong first quarter with profit before tax up 11% and an annualized return on tangible equity of 18.4%, excluding notable items.
- The company attracted net new invested assets of $22 billion and 300,000 new-to-bank customers in Hong Kong, marking its fifth consecutive quarter of double-digit growth in wealth.
- HSBC Holdings PLC (HSBC) announced a share buyback of up to $3 billion and a $0.10 per share interim dividend, reflecting a focus on capital return to investors.
- The bank's balance sheet remains strong with deposit surpluses in every major currency across all geographies, providing a steady recurring income stream.
- HSBC Holdings PLC (HSBC) is on track to deliver cost actions set out in February, including simplification-related cost savings and strategic cost reallocations.
- The external macroeconomic environment is less favorable and more uncertain, with trade policy uncertainty dampening business confidence and constraining investment.
- The bank's consensus downside scenario models a slowdown in global trade and GDP growth due to increased tariffs, potentially leading to incremental ECLs of $0.5 billion.
- Loan growth is expected to remain muted in 2025 due to macroeconomic uncertainty delaying decision-making and CapEx investments.
- The reclassification of the retained French home loan portfolio led to a $1.3 billion pretax loss in the quarter, impacting the CET1 ratio by approximately 0.2 percentage points.
- The bank faces potential dilution from BoCom's share issuance, with an expected accounting impact dilution loss of between $1.2 billion and $1.6 billion.
(Operator Instructions)
Welcome, ladies and gentlemen, to the analyst and investor webinar on the first quarter results for HSBC Holdings plc. For your information, this webinar is being recorded.
I will now hand over to Georges Elhedery, Group CEO.
Welcome all to today's call. I'm joined here in London by Pam. Before Pam takes you through the numbers, I would like to begin with some opening remarks.
Overall, there was a strong quarter marked by three key drivers. Momentum in our earnings, discipline our execution, and confidence in our ability to deliver our targets. First, we have strong momentum in our business. We had a strong first quarter with profit before tax up 11% and an annualized return on tangible equity of 18.4%, both excluding notable items.
We had our fifth consecutive quarter of double-digit growth in wealth and attracted net new invested assets of $22 billion as well as another 300,000 new-to-bank customers in Hong
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