Net loans and advances to UK customers climbs to $306 billion
HSBC recorded growth in UK mortgage and lending balances in the first half of 2026, with net loans and advances to UK customers rising to $306.2 billion from $286 billion a year earlier, as the group posted a 23% increase in pre-tax profit to $19.5 billion.
The UK business contributed pre-tax profit of $3.3 billion on a constant currency basis, up from $3.2 billion in the first half of 2025. On a reported legal entity basis, HSBC UK Bank recorded pre-tax profit of $3.9 billion, against $3.6 billion a year earlier. UK customer accounts grew to $348.3 billion from $336.5 billion over the same period.
Group-wide, net loans and advances to customers reached $1.02 trillion at 30 June 2026, up from $988.4 billion at 31 December 2025. On a constant currency basis, lending balances increased by $40 billion, with growth recorded across all business segments. The group described the expansion in loans as particularly notable in Hong Kong and the UK.
Net interest income rose by $1.4 billion compared with the first half of 2025, primarily driven by deposit balance growth and the reinvestment of the structural hedge at higher yields. Banking NII, which excludes funding costs associated with the trading book and insurance NII, increased by $1.6 billion to $22.9 billion. The net interest margin widened by four basis points to 1.61%.
Customer accounts across the group grew to $1.83 trillion at 30 June 2026, up from $1.79 trillion at 31 December 2025. On a constant currency basis, customer accounts increased by $56 billion, primarily reflecting growth in the corporate and institutional banking business.
Revenue grew 11% to $37.7 billion, supported by higher banking NII, strong wealth fee income in the International Wealth and Premier Banking and Hong Kong segments, and increased customer activity. Profit after tax reached $15.3 billion, up 23% on the first half of 2025.
HSBC first-half profits surge by 23% to £19.5 billion https://t.co/JcA7px6azn pic.twitter.com/MFz3u5gEFq
— The Independent (@Independent) August 4, 2026
Expected credit losses totalled $2.4bn for the half, $0.4 billion higher than in the first half of 2025, with provisions for wholesale banking reaching $1.6 billion. HSBC attributed a significant portion of the charge to "fraud-related, secondary, securitisation exposure with a financial sponsor in the UK" within its corporate and institutional banking business.
The Financial Times reported in May that HSBC had exposure to collapsed mortgage lender Market Financial Solutions through Apollo's asset-backed lending unit Atlas SP. The higher provisions also reflected deterioration elsewhere in the loan book. "Mid-market clients across the globe," said Pam Kaur, chief financial officer at HSBC Holdings plc, were among those driving the uptick. Additional allowances were set aside to reflect uncertainty from the ongoing conflict in the Middle East.
Operating expenses were $17.4 billion, 2% higher than in the first half of 2025, driven by increased technology spending and the impact of inflation. Cost savings from the group's organisational simplification programme partly offset the increase. The cost efficiency ratio improved to 46.2% from 49.9%.
The common equity tier 1 capital ratio stood at 14.1% at 30 June 2026, down 0.8 percentage points from 14.9% at 31 December 2025, reflecting the privatisation of Hang Seng Bank, dividends paid, and higher risk-weighted assets, partly offset by regulatory profit.
The board approved a second interim dividend of $0.10 per share and announced a share buy-back of up to $1 billion, expected to complete by the third-quarter 2026 results announcement.
"HSBC is becoming the stronger bank we set out to build," said Georges Elhedery (pictured right), group chief executive of HSBC. "We are executing our strategic priorities with pace, precision and discipline.
"This is allowing our four businesses to focus on their core strengths, grow, work together more effectively and deepen customer relationships. The result is a bank capable of achieving more."
The group raised its full-year 2026 banking NII guidance to at least $46 billion, from a previous target of around $46 billion. It maintained its ECL charge guidance of around 45 basis points as a percentage of average gross customer loans and reaffirmed its return on average tangible equity target of 17% or better for 2026, 2027 and 2028, excluding notable items. Target basis operating expenses remain on track to grow by approximately 1% for the year.
Following the balance sheet date, HSBC agreed to sell its Singapore insurance business to Allianz Asia Holdings for an estimated pre-tax gain of $1.8 billion, and entered an agreement to sell HSBC Australia's home and personal loans portfolio — comprising $25.3 billion in assets — to a Blackstone-managed entity, with the remainder of the Australian retail banking operation to be wound down over 18 months.
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