HSBC\’s profits slide as costs climb

HSBC Faces $2.1 Billion Hit from China Stake

The London‑based bank reported a $2.1 billion write‑down tied to its ownership in China’s Bank of Communications, a lender recapitalised by the nation’s finance ministry.

Half‑Year Profit Declines

• Profit after tax fell one third to $12.4 billion versus the first six months of 2024.
• Operating expenses rose 4 %, partly due to restructuring costs.
• Revenue slipped 9 % to $34.1 billion.

Strategic Overhaul

Georges Elhedery said the bank is “making positive progress” in a structural overhaul launched in October, aimed at simplifying the group’s structure and delivering $1.5 billion in annual cost savings by 2027. The shift is seen as a response to the “volatile trading” created by U.S. President Donald Trump’s tariff onslaught.

Market Reaction

HSBC shares dropped roughly 2.5 % in morning trading on the FTSE 100, despite an announced dividend payment and plans to repurchase up to $3 billion of shares.

Investor Outlook

Analysts like Russ Mould from AJ Bell noted that repositioning the bank is “not a simple task” given its size and scale, with challenges in property markets in Hong Kong and mainland China. The bank must continue to brace for setbacks in its results into 2026.