GOVERNANCE WATCH
By InsidEntity Editorial Desk · Oct 2, 2026 · 8 min read
Series 3 | 2 October 2026
One ordinary-looking number, taken apart until the number that matters is on the table.
A London-listed bank made US$29.9bn. Its Hong Kong bank booked 65.5% of it.
HSBC Holdings is incorporated in England, headquartered in London and listed there. In 2025 it reported US$29.9bn in profit before tax. Almost two-thirds of that was booked by one subsidiary, The Hongkong and Shanghai Banking Corporation.
Go one layer down and the Hong Kong business generates 32% of group profit on 15.7% of group risk-weighted assets, and its 30.4% cost efficiency ratio was the lowest reported among HSBC’s four businesses. Go one layer further and HSBC has spent US$13.7bn buying out the minority shareholders of Hang Seng Bank, its other Hong Kong bank.
At a glance
| The number | What it is |
|---|---|
| US$29.9bn | Reported group profit before tax, 2025 |
| 65.5% | Share booked by The Hongkong and Shanghai Banking Corporation |
| 23% → 32% → 16% | Hong Kong business: share of revenue, of profit, of risk-weighted assets |
| US$13.7bn | Cost of taking Hang Seng Bank private, completed in early 2026 |
The number
US$29.9bn. Reported profit before tax for the year to 31 December 2025, published on 25 February 2026. It was down 7% from US$32.3bn, mainly because of notable items, including US$2.1bn of dilution and impairment losses on HSBC’s stake in Bank of Communications, US$1.5bn of reserve recycling losses on the sale of a French loan portfolio, US$1.4bn of legal provisions and US$1.0bn of restructuring costs. Excluding them, and on a constant currency basis, profit before tax rose 7% to US$36.6bn.
This piece uses the reported US$29.9bn throughout, because the geographic split below is published on that basis.
The question
Where was the money actually made?
HSBC reorganised in January 2025 into four businesses: Hong Kong, the UK, Corporate and Institutional Banking (CIB) and International Wealth and Premier Banking (IWPB). It also reports profit by legal entity. The two views answer the question in different ways, and both point the same direction.
Number 1: 65.5% from one subsidiary
By legal entity, The Hongkong and Shanghai Banking Corporation booked US$19.6bn of the US$29.9bn. HSBC’s ring-fenced UK retail bank booked US$7.4bn. The remaining legal entities and group-level items net to about US$2.9bn.
| Legal entity, reported profit before tax | 2025, US$m | Share | 2024 share |
|---|---|---|---|
| The Hongkong and Shanghai Banking Corporation | 19,588 | 65.5% | 63.4% |
| HSBC UK Bank plc | 7,409 | 24.8% | 22.2% |
| HSBC North America Holdings | 1,198 | 4.0% | 2.6% |
| HSBC Bank Middle East | 1,090 | 3.6% | 3.4% |
| Grupo Financiero HSBC (Mexico) | 649 | 2.2% | 2.3% |
| HSBC Bank plc (non-ring-fenced, incl. Europe) | (224) | (0.7%) | 8.2% |
| Other trading entities | 1,798 | 6.0% | 5.7% |
| Holding companies, service centres, eliminations | (1,601) | (5.4%) | (8.4%) |
| Total | 29,907 | 100% | 100% |
The 2024 shares shown add to 99.4%. The remaining 0.6% was HSBC Bank Canada, which HSBC sold during 2024 and which has no 2025 result.
Source: HSBC Holdings plc 2025 results, distribution of results by legal entity.
A legal entity is not a country. The Hongkong and Shanghai Banking Corporation is incorporated in Hong Kong but carries much of HSBC’s Asia-Pacific business, so its US$19.6bn includes more than Hong Kong itself. What the table does show is where the profit is legally booked, and therefore which balance sheet, regulator and capital base stand behind it.
HSBC Bank plc, the London-based entity that holds the non-ring-fenced UK and European business, swung from a US$2.6bn profit to a US$224m loss. Two of the year’s largest notable items arose in Europe: US$1.5bn of losses on selling a retained French loan portfolio, and a US$1.1bn provision in Luxembourg over a Madoff-related claim.
Number 2: 23% of revenue, 32% of profit
The business-segment view isolates the Hong Kong business itself: Retail Banking and Wealth, and Commercial Banking, of HSBC Hong Kong and Hang Seng Bank. The Hong Kong segment is therefore not a complete measure of HSBC’s exposure to Hong Kong-based corporate and institutional activity. HSBC also reports relevant activity through CIB, and from 1 January 2026 it moved further clients, primarily in Hong Kong and the UK, into CIB. The 2025 figures below are presented on the basis HSBC originally reported.
On that narrower definition, Hong Kong produced 23% of group revenue, 32% of profit before tax and used 16% of risk-weighted assets.
| 2025 | Revenue, US$m | Share of revenue | Profit before tax, US$m | Share of profit | Share of RWAs | Cost efficiency ratio | InsidEntity calculation: 2025 PBT per US$ of RWAs (constant currency) |
|---|---|---|---|---|---|---|---|
| Hong Kong | 15,878 | 23.3% | 9,576 | 32.0% | 15.7% | 30.4% | 6.9c |
| UK | 12,938 | 19.0% | 6,705 | 22.4% | 17.2% | 42.8% | 4.4c |
| CIB | 27,637 | 40.5% | 11,386 | 38.1% | 46.0% | 56.3% | 2.8c |
| IWPB | 14,520 | 21.3% | 4,367 | 14.6% | 10.1% | 63.9% | 4.9c |
| Corporate Centre | (2,699) | n/m | (2,127) | (7.1%) | 11.0% | n/m | n/m |
| Group | 68,274 | 100% | 29,907 | 100% | 100% | 53.4% | 3.4c |
Source: HSBC Holdings plc 2025 results, business segment analysis.
Hong Kong spends about 30 cents to earn each dollar of revenue; CIB spends 56. On InsidEntity’s calculation, which HSBC does not report, each dollar of risk-weighted assets in Hong Kong produced 6.9 cents of pre-tax profit, against 2.8 cents in CIB. The Hong Kong business also holds US$543bn of customer deposits, 30% of the group’s total, and HSBC puts its deposit market share there at 25.4%.
Source: HSBC Holdings plc 2025 results; InsidEntity calculations.
The concentration has a cost side too. Credit-loss charges on Hong Kong commercial real estate were US$0.7bn in 2025, up from US$0.1bn a year earlier.
Number 3: US$13.7bn
HSBC already controlled Hang Seng Bank and consolidated its results. In January 2026 Hang Seng shareholders approved HSBC’s offer to buy out the minority for HK$106bn, about US$13.7bn. The scheme took effect on 26 January, Hang Seng was delisted the next day, and the deal settled on 4 February.
Because Hang Seng was already consolidated, the deal does not change group profit before tax. It changes who owns that profit: the minority interest, US$7.0bn of equity at the end of 2025, comes out, and Hang Seng’s earnings now belong entirely to HSBC shareholders.
It also had a price beyond the cheque:
- 110 basis points of capital. HSBC put the net hit to its common equity tier 1 ratio at 110bps, measured on its 14.9% year-end ratio. On that base it would have taken the ratio to roughly 13.8% before subsequent capital generation, below the bottom of its 14% to 14.5% target range.
- A pause on buybacks. HSBC said it would not start further share buybacks until the ratio was back within or above that range. In 2025 it had completed US$6bn of buybacks on top of US$12.9bn of dividends. The pause has since ended: with the ratio at 14.1% on 30 June 2026, HSBC announced on 4 August a new buyback of up to US$1bn, expected to complete by its third-quarter results on 27 October 2026.
- US$0.3bn of cost synergies, which HSBC says it will reinvest in Hong Kong.
Source: HSBC Holdings plc 2025 results and 2026 interim results. The 13.8% is the year-end ratio less the 110bps impact HSBC disclosed, before subsequent capital generation.
The bank’s chairman called Hong Kong a home market for the group. The capital allocation says the same thing.
The ratings
On current inputs, HSBC Holdings’ Company Risk Rating is 3.43 (Good) and its Financial Stability Rating is 3.7 (Good).
| CRR pillar | Score |
|---|---|
| Director Independence | 5.00 |
| Director Capacity | 3.71 |
| Auditor Independence | 0.00 |
| Shareholder Influence | 5.00 |
| Company Risk Rating | 3.43 |
The CRR is the average of the four pillar scores: (5.00 + 3.71 + 0.00 + 5.00) ÷ 4 = 3.43. Director Independence currently scores 5.00 (Benchmark), subject to change once HSBC’s directors submit InsidEntity’s independence questionnaires.
Auditor Independence is an assessed 0.00, not missing data. PricewaterhouseCoopers has audited HSBC since the 2015 financial year, so FY2025 was its eleventh year, beyond the ten-year band. HSBC re-tendered the audit in 2023 and reappointed PwC for 2025 to 2034, after which UK rules require rotation.
The auditor clock is the number behind this rating. It is the only pillar below 3.71.
The InsidEntity takeaway
The headline number is true, but incomplete. HSBC reports as a London-listed global bank, and it is one. But 65.5% of its 2025 pre-tax profit was booked by its Hong Kong-incorporated bank, its Hong Kong business earned more pre-tax profit per dollar of risk-weighted assets than any other part of the group on InsidEntity’s calculation, and it committed US$13.7bn to buy out the minority shareholders of Hang Seng Bank.
The more revealing number to watch next may be how much of HSBC’s profit attributable to shareholders comes from Hong Kong now that Hang Seng’s minority is gone, and whether Hong Kong commercial property keeps adding to the credit-loss line.
Related reading: The Number Behind the Number | 04 BHP; The Number Behind the Number | 03 Apple; Moody’s rated Standard Bank and Nedbank in one sentence. The audit clock decides which one leads.. See HSBC’s full record on InsidEntity.
Independent research. Not financial advice. No allegation of wrongdoing is made against any individual or entity named.
Know more. Risk less. Decide better.
Sources: HSBC Holdings plc 2025 results, 25 February 2026, for profit by legal entity and business segment, segment revenue, risk-weighted assets and cost efficiency, notable items, the capital outlook and the Hang Seng Bank privatisation (note 10); HSBC Holdings plc Annual Report and Accounts 2025, for the business segment definitions, the 25.4% Hong Kong deposit market share and Hong Kong commercial real estate credit losses; HSBC Holdings plc 2026 interim results, 4 August 2026, for the US$1bn buyback, the 14.1% CET1 ratio at 30 June 2026 and the client transfer into CIB from 1 January 2026; HSBC change of auditor announcement, 2 August 2013, for PwC’s appointment for the year ending 31 December 2015; HSBC outcome of audit tender process, 20 January 2023, for PwC’s reappointment for 2025 and beyond, with a tender every 10 years and rotation every 20.
Note on figures: Shares of profit and revenue are calculated from the US$m figures shown, not from rounded billion figures. Profit before tax per US$ of risk-weighted assets is an InsidEntity calculation that divides each business’s 2025 profit before tax by its risk-weighted assets as published by HSBC; HSBC does not report this measure. The 2025 segment figures are on the basis HSBC originally reported, before the client transfer into CIB on 1 January 2026. Ratings are as read from the platform on 2 October 2026.