HSBC Holdings plc Q1 FY2026 earnings call

Had positive performance with annualized return on tangible equity 18.7%; Continued disciplined progress in simplifying the group, actioned $0.2 billion of simplification saves; Revenue excluding notable items grew 4% year on year; On track to achieve 1% cost growth in 2026 compared to 2025 on target basis; Customer deposits momentum with $99 billion growth over last 12 months, loans growth picked up; CET1 capital ratio 14%; Reiterate targets of revenue rising to 5% year-on-year growth by 2028, return on tangible equity of 17% or better, dividends 50% of earnings per share.

Banking NII increased $0.3 billion year on year to $11.3 billion, fell $0.5 billion quarter on quarter; Wholesale transaction banking saw fee and other income grow 2% year on year; Wealth grew fee and other income 15% to $2.7 billion, added 287,000 new-to-bank customers in Hong Kong; Credit's first quarter ECL charge was $1.3 billion, equivalent to 52 basis points annualized, updated full year 2026 guidance to around 45 basis points, including $0.3 billion related to Middle East conflict and $0.4 billion for fraud-related secondary securitization exposure.

Update banking NII to around $46 billion given higher rate outlook; Update ECL charge to 45 basis points given macroeconomic and market uncertainty; Assessed range of top-down stress scenarios.

Middle East conflict impact on ECL; Fraud-related secondary securitization exposure risk; Macroeconomic uncertainty risks.

Q: On wealth, flows in competitive landscape in Hong Kong and private markets approach.

A: Pleased with CSM balance and investment distribution, saw shift in products, private credit exposure within comfortable range and working on due diligence; Q: On cost growth and Middle East scenario stress scenarios.

A: Simplification actions will give savings in second half, Middle East scenario involves severe stock market drop, oil price surge, etc., and impact on revenue and ECL; Q: On Middle East scenario breakdown and banking NII sequential drivers.

A: Impact equal on revenues and ECLs, banking NII guidance conservative considering uncertainties; Q: On private credit exposure proportion and wealth revenue growth difference.

A: Exposure accounts for part of $3 billion bucket, fee income growth due to CSM balances flowing through over time; Q: On fraud cases color and downside scenario.

A: Fraud is idiosyncratic, downside scenario 45% built from various factors and unlikely to shift much; Q: On wealth net new money and capital share buybacks.

A: Q1 strong for investments, capital generation strong, share buyback decision quarterly; Q: On Hang Seng synergies and global footprint.

A: Synergies to come through later, Indonesia retail business not meeting wealth strategy hurdle rate; Q: On credit costs and CSM in wealth.

A: Credit costs with idiosyncratic and Middle East elements, CSM balances drip fee over 9 - 10 years; Q: On banking NII guidance and revenue growth.

A: Banking NII guidance based on mid-April yield curves, outer year revenue growth affected by yield curve changes