HSBC reported a profit of $9.4 billion for the first quarter of 2026, down from $9.48 billion a year earlier. This decline stems from rising credit provisions and a substantial fraud-related charge.
On May 5, HSBC faced a 5% drop in shares, making it the biggest faller on the FTSE 100. The bank took a hit of $1.3 billion due to these factors.
The fraud-related charge amounted to $400 million, primarily linked to its investment banking division. Analysts express concern over HSBC’s total exposure to the private credit sector, which stands at $6 billion.
As of midday on May 5, HSBC’s revenue increased by 6%, totaling $18.6 billion for the first quarter. However, this growth was overshadowed by the significant profit decline.
The UK financial regulator has launched an investigation into the fraud scandal involving Mortgage Financial Solutions. This move adds another layer of uncertainty for HSBC as it navigates through these challenges.
The impact of the ongoing conflict in the Middle East has also contributed to potential losses, with a reported increase of $300 million. This situation casts a shadow over HSBC’s otherwise solid revenue numbers.
Pam Kaur emphasized that HSBC has always been mindful of private credit risks. Yet, Dan Coatsworth noted that the sizeable fraud-related charge reminds stakeholders that risks can arise even in familiar markets.
Richard Hunter remarked that these credit impairments largely blotted the copybook for this quarter. Chris Beauchamp added that the Hormuz crisis looms large in these results.