Banking giant posts lower earnings in Q1 as geopolitical and domestic challenges bite
HSBC’s profits slipped in 2026’s first quarter as the US-Iran war and private credit sector stress weighed against the company’s earnings.
The banking giant said profits for the three months ended March 31 were $9.4 billion, a drop of 1% compared with the same time last year, as it set aside more cash for potentially imperilled loans.
Those provisions for credit losses totalled $1.3 billion, HSBC said on Tuesday, including a $300 million allocation specifically linked to the US-Iran war. That total was $400 million higher than the amount set aside in 2025’s first quarter.
Revenue was up by 6%, hitting $18.6 billion, while net interest income jumped to $8.9 billion – an increase of 8%.
The company took a $400 million hit linked to a “fraud-related, secondary, securitisation exposure,” in the UK. According to chief financial officer Pam Kaur, that charged concerned loans made to an unspecified private equity group.
The Financial Times said that allocation was linked to the collapse of Mortgage Financial Solutions (MFS) earlier this year, which also negatively impacted Barclays’ first-quarter profits.
The Iran war has raised fears of a sharp economic contraction in the UK and prompted scores of lenders to raise rates and bring products off the market in recent weeks.
Kaur suggested the company is monitoring the conflict closely as it maps out its plans for the year ahead. “This is very similar to what we see in times of stress,” she said. “And this time around, obviously we’d see how the conflict progresses and if we see stability in our books, we would release those reserves.”
The company’s share price slipped by over 5% as the results filtered through. Speaking on the company’s exposure to the private credit sector, Kaur said its presence was “very small” and said it had “always been very mindful” of risks in that space.
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