HSBC: Target average tangible equity return of 17% from 2026 to 2028

HSBC Holdings (00005.HK) announced that its target is to achieve an average return on tangible equity of 17% or higher for the years 2026, 2027, and 2028 (excluding notable items). This revised target reflects the group's trend of increasing profitability and satisfactory progress in strategy execution.

The group aims for year-on-year revenue growth from 2026 to 2028, striving for a 5% increase in revenue in 2028 compared to 2027 (excluding notable items and calculated at constant exchange rates). The target payout ratio for dividends for 2026, 2027, and 2028 is maintained at 50%. The target payout ratio is calculated as a percentage of earnings per share (excluding significant notable items and related impacts).

For 2026, based on current expectations for policy interest rates, the group expects net interest income from banking operations to reach at least USD 45 billion. The expected credit loss provisions are anticipated to average around 40 basis points of total loans. In the medium term, the plan is to maintain this percentage within a range of 30 to 40 basis points. The goal is to keep the increase in target operating expenses around 1%.

The group intends to maintain its medium-term target range for the common equity tier 1 capital ratio between 14% and 14.5%. Due to the privatization of Hang Seng Bank, there is a net impact of 110 basis points on the common equity tier 1 capital as of January 2026, which may cause the capital ratio to fall below the group's target range in January 2026