HSBC Holdings plc - ADR

Strong Q1 Performance: HSBC reported a profit before tax increase of 11% year-on-year and an annualized return on tangible equity of 18.4% (excluding notable items). This marks the fifth consecutive quarter of double-digit growth in the wealth segment, with the addition of 300,000 new-to-bank customers and net new invested assets of $22 billion primarily from Asia.

Cost Management and Efficiency Target: HSBC is on track to achieve $1.5 billion in gross cost savings from organizational simplification by 2025. The bank aims for approximately 3% cost growth against the 2024 baseline, highlighting discipline in cost management despite external challenges.

Macro Environment and Tariff Impact: The current macroeconomic environment is described as uncertain, with potential impacts from increased tariffs resulting in a low single-digit percentage decline in group revenues. The expected ECL (expected credit losses) charge from a scenario of increased tariffs is estimated at $0.5 billion, indicating potential risks to credit performance.