HSBC Holdings PLC (LSE:HSBA) reported first-quarter pre-tax profit slightly below analyst expectations, due to a larger hit from expected credit losses linked to the war in the Gulf.
Pre-tax profit of $9.37 billion was down slightly from $9.48 billion a year earlier but up from $6.80 billion in the previous quarter. It was below the $9.59 billion average analyst forecast.
Expected credit losses and costs increased, partly offset by stronger income from wealth management and net interest income.
Net operating income rose to $18.62 billion from $17.64 billion a year ago and $16.36 billion in the fourth quarter, driven by higher customer activity in wealth and banking. It beat the $18.49 billion consensus forecast.
Net interest income increased by $0.6 billion to $8.9 billion, supported by deposit growth and higher yields on reinvestments.
Credit impairment charges rose to $1.3 billion, up $0.4 billion a year ago, driven by a $0.4 billion fraud-related exposure in the UK and a $0.3 billion increase in provisions linked to a weaker economic outlook following the onset of conflict in the Middle East.
Operating expenses increased 8% to $8.7 billion, reflecting higher pay, inflation and technology investment.
Annualised return on tangible equity was 17.3%, or 18.7% excluding notable items.
The bank maintained its targets, including a return on tangible equity of at least 17% through to 2028. It also lifted its 2026 net interest income guidance to around $46 billion.
A $0.10 per share dividend was declared, the same as a year ago.