HSBC reported stronger underlying earnings in 2025 but lower statutory profit after one-off charges and impairments weighed on headline results. The bank said profit before tax excluding notable items rose to $36.6 billion, while reported profit before tax fell to $29.9 billion from $32.3 billion a year earlier.

The lender increased its full-year dividend by 14 per cent and said it would pause share buybacks for up to three quarters as it rebuilds capital following its $13.7 billion acquisition of Hang Seng Bank.

Group chief executive Georges Elhedery said 2025 had been a year in which the bank “performed, transformed and invested for growth”, delivering “strong earnings” despite $6.7 billion of notable items. Among those were impairment charges, including a writedown of its investment in Bank of Communications.

Statutory profit before tax declined year on year, but underlying performance strengthened, with revenues rising 5 per cent and return on tangible equity excluding notable items improving to 17.2 per cent.

Capital discipline is now the immediate focus. HSBC ended the year with a common equity tier 1 [CET1] ratio of 14.9 per cent. After completing the Hang Seng privatisation in January, the bank said the deal would reduce that ratio by about 110 basis points, potentially dipping below the bank’s goal range of 14 to 14.5 per cent.

CET1 is the shock absorber that protects depositors and the financial system. Regulators require banks to hold a minimum amount.

“Our first priority is now restoring the CET1 ratio,” Mr Elhedery said, adding that buybacks would be suspended for up to three quarters.

The Q4 results also reflect the first full year of global minimum tax rules, including Bermuda’s new corporate income tax regime introduced in 2025.

HSBC said the changes increased local overseas tax liabilities while reducing the UK “top-up” tax charge under Organisation of Economic Co-operation and Development Pillar Two rules. The bank’s effective tax rate was broadly unchanged at 22.7 per cent, compared with 22.6 per cent a year earlier, indicating the reforms shifted where tax is paid rather than materially increasing the group’s overall tax burden.