HSBC has seen its profit before tax drop by just over 1% in the year to 31 March, totalling $9.37bn, following a $400m "fraud-related, secondary, securitisation exposure" with a UK financial sponsor in its corporate and institutional banking business.

The bank said this profit drop also reflected higher expected credit losses.

In this period, HSBC saw its revenue increase by 6% to $18.6bn, following strong growth in wealth fees and other income in its international wealth and premier banking and Hong Kong business segments, supported by higher customer activity.

Furthermore, its net interest income totalled $8.9bn, marking an 8% increase. This was driven by deposit balance growth, which is the benefit of its reinvestment of its structural hedge at higher yields and the impact of lower market interest rates on the funding deployed to the trading book.

HSBC also announced that its average return on tangible equity (RoTE) was 17.3%, compared with 17.9% in Q1 2025.

Group chief executive officer at HSBC, Georges Elhedery, stated: "We continued to make positive progress in creating a simple, more agile, growing HSBC. Each of our four businesses contributed to firm-wide revenue growth and each delivered an annualised RoTE in excess of 17%, excluding notable items.

"In periods of greater uncertainty, customers turn to us more as their trusted partner to navigate complexity with the financial strength, stability and expertise they know they can rely on. We remain confident in achieving the targets we set out in February 2026."

In its outlook, the bank said the macroeconomic outlook, is facing heightened uncertainty, "creating volatility in both economic and financial markets resulting in both tailwinds and headwinds".

HSBC said it is well-positioned to manage the impact of these challenges through its revenue streams, conservative approach to credit and strong deposit franchise.

It now expects its banking net interest income to reach around $46bn in 2026, while its RoTE is expected to stay at 17% or better for 2026, 2027 and 2028 respectively.

Head of markets at HSBC, Dan Coatsworth, stated that the bank's exposure to faster growing developing economies brings extra growth potential along with added risks.

He added: "Revenue was better than anticipated and the company is seeing good growth in insurance and wealth management, particularly in Hong Kong. These are income streams which are less tied to interest rates and therefore more consistent.

"The shifting outlook on interest rates, with central banks battling to contain inflationary pressures linked to the current energy shock, has prompted an increase in net interest income forecasts. Elhedery’s messaging aimed to reassure investors that his overhaul of the business, which involves stripping out costs and exiting lower growth markets, remains on track.

"For the most part Elhedery’s tenure and strategy has been warmly received by the market. We now have a reminder of the challenges banks face against an uncertain and frequently shifting backdrop. In HSBC’s case, the turnaround of a business which is the stock market equivalent of a container ship won’t always be smooth sailing."

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