Georges Elhedery, Group CEO, said: “2025 was a year of decisive action and swift execution, which is reflected in our strong performance. Each of our four businesses performed well and we have strong momentum across the bank. That is why we are raising our ambition and targeting a 17% RoTE or better, excluding notable items, in each year from 2026 to 2028. We are also targeting year-on-year revenue growth over the same period on the same basis, rising to 5% in 2028. We are becoming a simple, more agile, focused bank, one that moves with the speed our customers need to navigate the modern world. We are delivering growth, investing for growth and we are executing our strategy with discipline and precision. That gives us confidence in our ability to continue delivering for our shareholders.”

2025 financial performance (vs 2024)

• Reported profit before tax decreased by $2.4 billion to $29.9 billion, mainly due to a $4.9 billion year-on-year net adverse impact from notable items. Profit after tax decreased by $1.9 billion to $23.1 billion.
• In 2025, notable items included dilution and impairment losses of $2.1 billion related to our associate Bank of Communications Co., Limited (BoCom), reserve recycling losses of $1.5 billion following the completion of the sale of our French retained portfolio of home and certain other loans, legal provisions of $1.4 billion and restructuring and other related costs associated with our organisational simplification of $1.0 billion. In 2024, notable items included net losses relating to our disposals in Canada and Argentina of $1.4 billion.
• Constant currency profit before tax excluding notable items increased by $2.4 billion to $36.6 billion, from a strong performance in Wealth in our International Wealth and Premier Banking (IWPB) and Hong Kong businesses, and from Wholesale Transaction Banking in our Corporate and Institutional Banking (CIB) business. This was partly offset by a rise in expected credit losses and other credit impairment charges (ECL) and an increase in operating expenses due to planned investment and inflation.
• RoTE in 2025 was 13.3%, compared with 14.6% in 2024. Excluding notable items, RoTE in 2025 was 17.2%, a rise of 1.6 percentage points compared with 2024.
• Revenue of $68.3 billion increased by $2.4 billion or 4% compared with 2024. The increase was primarily due to fee and other income growth in Wealth from Investment Distribution and Insurance, and in Wholesale Transaction Banking, particularly in Foreign Exchange in CIB. This was partly offset by the year-on-year impact of notable items, mainly relating to business disposals and a dilution loss related to BoCom. Constant currency revenue excluding notable items rose by $3.4 billion to $71.0 billion.
• Net interest income (NII) of $34.8 billion was $2.1 billion higher than 2024 reflecting the benefit of the reinvestment of our structural hedge at higher yields, deposit balance growth and higher NII in Markets Treasury. In addition, the increase included the non-recurrence of a $0.2 billion loss in 2024 on the early redemption of legacy securities. This was partly offset by the adverse year-on-year impact of $1.6 billion from business disposals in Argentina and Canada, and margin compression on our deposits. The growth in NII of $2.1 billion also reflected a benefit from lower funding costs associated with the trading book of $1.7 billion. Banking net interest income (banking NII), which excludes these funding costs, increased by $0.3 billion to $44.1 billion.
• Net interest margin (NIM) of 1.59% was 3 basis points (bps) higher, reflecting the reinvestment of our structural hedge at higher yields.
• ECL were $3.9 billion, an increase of $0.4 billion compared with 2024, including charges in both periods related to the commercial real estate (CRE) sectors in Hong Kong and mainland China. In 2025, the charge in this sector in Hong Kong of $0.7 billion (2024: $0.1 billion) reflected higher allowances for new defaulted exposures, the impact of an over-supply of non-residential properties that has put continued downward pressure on rental and capital values, and updates to our models used for ECL calculations. The 2025 charge in the mainland China CRE sector was $0.2 billion (2024: $0.4 billion). ECL were 39 bps of average gross loans, including loans and advances classified as held for sale.
• Operating expenses increased by $3.4 billion or 10% to $36.4 billion. The increase primarily reflected notable items in 2025 of $3.0 billion, including legal provisions of $1.4 billion, restructuring and other related costs associated with our organisational simplification of $1.0 billion, and $0.5 billion related to disposals, wind-downs, acquisitions and related costs.
• Cost growth also reflected planned spend and investment in technology, higher performance-related pay and the impacts of inflation, partly offset by reductions related to our business disposals and the benefits of our organisational simplification.
• Target basis operating expenses rose by 3%, in line with our cost growth target. This increase primarily reflected higher planned spend and investment in technology, higher performance-related pay and the impact of inflation, partly offset by the benefits of our organisational simplification.
• Customer lending balances rose by $57.7 billion including favourable foreign currency translation differences. On a constant currency basis, lending balances rose by $17.6 billion, mainly in our UK business reflecting growth in mortgage and commercial customer lending.
• Customer accounts rose by $131.9 billion, including favourable foreign currency translation differences. On a constant currency basis, customer accounts increased by $67.6 billion with growth in all our businesses, particularly our Hong Kong business segment.
• Common equity tier 1 (CET1) capital ratio remained at 14.9%. This reflected an increase in risk-weighted assets (RWAs), which was offset by an increase in CET1 capital through capital generation net of distributions. The increase in RWAs was mainly driven by foreign currency translation differences and asset size movements.
• The Board has approved a fourth interim dividend of $0.45 per share, resulting in a total of $0.75 per share in respect of 2025.

4Q25 financial performance (vs 4Q24)

• Reported profit before tax up $4.5 billion to $6.8 billion. The increase included a $3.3 billion year-on-year net favourable impact from notable items, primarily due to the non-recurrence of the recycling of foreign currency losses and other reserves of $5.2 billion recognised following the completion of sale of our business in Argentina in 4Q24, partly offset by reserve recycling losses of $1.5 billion following the completion of the sale of our French retained portfolio of home and certain other loans in 4Q25. The increase also included growth in banking NII and lower ECL. Reported profit after tax up $4.6 billion to $5.2 billion.
• Revenue of $16.4 billion increased by $4.8 billion or 42%, including a $3.6 billion year-on-year impact from notable items from the disposals mentioned above. The increase in revenue also reflected growth in banking NII, as well as higher fee and other income from Wealth. Constant currency revenue excluding notable items increased by $1.0 billion to $17.7 billion.
• ECL down $0.5 billion to $0.9 billion, primarily reflecting lower ECL on wholesale exposures, in particular as 4Q24 included stage 3 charges relating to the CRE sector in mainland China of $0.2 billion and a charge in CIB relating to a single UK corporate exposure.
• Operating expenses increased by $0.7 billion or 8% to $9.3 billion. The increase reflected notable items, including an increase in restructuring and other related costs associated with our organisation simplification of $0.2 billion. The increase also reflected higher planned spend and investment in technology, higher performance-related pay and the impact of inflation, partly offset by the benefits of our organisational simplification.

Outlook

Group financial targets

• We are targeting a RoTE of 17% or better for 2026, 2027 and 2028, excluding notable items. Our revised target reflects momentum in our earnings and the positive progress we are making in our strategic execution.
• We are targeting year-on-year growth in revenue from 2026 to 2028, rising to 5% growth in 2028 compared with 2027 excluding notable items and on a constant currency basis.
• We maintain our dividend payout ratio target basis of 50% in 2026, 2027 and 2028. Our target basis payout ratio is calculated as a percentage of earnings per share (EPS) excluding material notable items and related impacts.

In respect of 2026:

• We expect banking NII of at least $45 billion, based on our current expectations for policy rates.
• We expect ECL charges as a percentage of average gross loans to be around 40bps in 2026 (including held for sale loan balances). Over the medium term, we retain our planning range of 30–40bps.
• We retain our commitment to Group-wide cost discipline. We are targeting growth in target basis operating expenses of approximately 1% compared with 2025.