HSBC Q1 2026 profit dips as credit losses rise

HSBC reported first-quarter 2026 pre-tax profit of $9.4 billion, down marginally from $9.5 billion in the same period a year earlier and below analysts’ estimates. The performance reflects a combination of higher credit costs and continued revenue growth across key business lines.

Despite the profit shortfall, group revenue increased 6% year-on-year to $18.6 billion, exceeding market expectations. Management highlighted strong contributions from wealth management and other income streams as key drivers of the top-line expansion.

A main factor behind the earnings miss was a rise in expected credit losses. HSBC recorded $1.3 billion of expected credit losses in the first quarter, $400 million higher than in the same period last year. These charges reduced the benefit of stronger revenue growth at group level.

The bank also underscored that ongoing geopolitical and economic uncertainties, including risks linked to the conflict in the Middle East, could influence future credit quality and financial performance. These factors remain part of the backdrop for its provisioning assumptions.

HSBC’s 6% revenue increase to $18.6 billion was supported in part by robust activity in wealth management. The bank pointed to this area, alongside other income streams, as helping to offset the pressures from higher credit charges at group level.

While the articles cited did not break down revenue by region or business in detail, they indicated that the overall performance was strong enough to surpass analyst expectations on the top line, even as profit undershot consensus forecasts.

Alongside its first-quarter figures, HSBC’s board approved a first interim dividend for 2026 of $0.10 per share. This payout signals the bank’s intention to continue returning capital to shareholders despite the modest decline in quarterly profit and elevated credit losses.

The decision to maintain a cash distribution comes against a backdrop of challenging economic conditions and uncertainty in some of the bank’s key markets. Management framed the dividend as part of an ongoing commitment to shareholder returns while navigating these headwinds.

HSBC highlighted risks stemming from the conflict in the Middle East as a key area of attention for its risk management and forward-looking guidance. These geopolitical factors, along with broader economic uncertainties, are incorporated into the bank’s view of potential credit losses.

Taken together, the quarter shows HSBC balancing higher risk costs and a complex operating environment with solid underlying revenue growth and continued capital returns. The interplay between credit charges, income momentum and geopolitical risk will remain central to its upcoming results.