HSBC (0005) recorded a 6 percent rise in net interest income to US$34.8 billion in 2025, reflecting the benefit of the reinvestment of structural hedge at higher yields, deposit balance growth, and higher income in the markets treasury.
Net interest margin in the year inched up by 3 basis points to 1.59 percent. Banking net interest income edged up to US$44.1 billion, and it expects the figure to reach at least US$45 billion this year.
The common equity tier 1 capital ratio remained at 14.9 percent last year, and it aims to keep it in the range of 14-14.5 percent over the medium term. The lender said the figure may fall below the target in the first half due to a 110 bps impact from the privatization of Hang Seng Bank.
It plans to address this through organic capital generation and pausing share buy-backs until CET1 capital is back within or above this range.
Expected credit losses widened by 13 percent to US$3.85 billion as charges related to Hong Kong commercial real estate jumped 6 times to US$700 million. The rise reflected higher allowances for new defaulted exposures, the impact of an oversupply of non-residential properties that has put continued downward pressure on rental and capital values, and updates to its models used for ECL calculations.
