HSBC Profit Tumbles As China Losses Mount

HSBC Holdings reported a sharper-than-expected drop in profit, weighed down by write-downs linked to its exposure to a Chinese bank and Hong Kong real estate.

Europe’s largest bank has suffered losses in China.

Despite this, the bank said it would press forward with its global restructuring, Selena Li and Lawrence White reported for Reuters.

HSBC’s 26% slump in pretax profit in the first half of the year underscores the challenge facing CEO Georges Elhedery.

Europe’s largest bank has suffered losses in China—where it has increasingly concentrated its growth strategy in recent years after scaling down in Western markets.

Elhedery, who initiated a sweeping restructuring plan after taking the helm last year, said during an earnings call that the bank has begun reviewing its retail operations in Australia, Indonesia, and Sri Lanka.

It also plans to wind down its retail banking business in Bangladesh in the second half of 2025.

He added that HSBC’s corporate and institutional banking segments remain unaffected.

The bank reported a pretax profit of $15.8 billion for the first six months of the year, missing analysts’ expectations of $16.5 billion.

Shares of HSBC dropped 4.5% in London trading, mirroring earlier losses in Hong Kong.

The bank’s stock has gained 36% over the past year, benefiting from higher lending margins and growing income in its wealth business—though still trailing the 76% rise seen by rival Standard Chartered.

HSBC also disclosed an additional $2.1 billion impairment tied to its stake in the state-run Bank of Communications. This follows a $3 billion write-down in February 2024 amid mounting bad loans in China.