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HSBC has said it will not make further share buybacks until its capital ratios have improved following its $14bn privatisation of Hang Seng Bank, potentially extending its previous warning of a three-quarter suspension.
The UK lender has a target of keeping its common equity tier one capital ratio — a measure of a bank’s ability to withstand financial distress — between 14 and 14.5 per cent but warned that it fell below this range in January after folding in Hang Seng Bank.
The warning came as HSBC reported $6.8bn of pre-tax profits in the final quarter of 2025, up from $2.3bn a year earlier but below analyst expectations compiled by Bloomberg. Revenue rose 42 per cent to $16.4bn.
Its CET1 ratio was 14.9 per cent in December but fell 1.1 percentage points in January following the close of its Hang Seng privatisation.
The bank said it would issue a fourth-quarter dividend of $0.45 a share, resulting in a total $0.75 a share in 2025.
“2025 was a year of decisive action and swift execution, which is reflected in our strong performance,” said chief executive Georges Elhedery. “Each of our four businesses performed well and we have strong momentum across the bank.”
HSBC in October announced it would take Hang Seng Bank fully private in a move seen as doubling down on the Chinese territory and a bid to more closely manage the local lender.
The buyout of minority shareholders cost $13.6bn. HSBC at the time said it would be financed by pausing share buybacks for three quarters. The transaction was completed at the end of January and Hang Seng was delisted from the Hong Kong Stock Exchange.
HSBC on Wednesday said its net interest margin, a key measure of bank profitability, rose 0.1 percentage points year on year in the fourth quarter, driven by higher short-term interest rates in Hong Kong.
Elhedery took over as chief executive in 2024 and kicked off a worldwide restructuring that included shutting HSBC’s equity capital markets division in the US and Europe and pulling out of some markets entirely.
HSBC in December announced that its then interim chair Brendan Nelson would continue in the role permanently after a chaotic search process that left the position vacant for months.