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# UK's HSBC Reports Q1 2026 Pre-Tax Profit of $9.4 Billion, Missing Estimates on Higher Credit Losses
- URL: https://www.theglobalbanker.com/hsbc-q1-2026-pre-tax-profit-9-4-billion-misses-estimates-higher-credit-losses/
- Published: 2026-05-05T09:55:00.000Z
- Updated: 2026-10-01T23:26:36.000Z
- Description: HSBC posted first-quarter pre-tax profit of $9.4 billion, down $0.1 billion year on year and below analyst estimates, with higher expected credit losses weighing on results.
- Author: TGB Editorial Team
- Tags: Banking News, Europe

HSBC Holdings reported first-quarter reported profit before tax of $9.4 billion on Tuesday, missing analyst estimates as higher expected credit losses weighed on the London-headquartered lender's opening quarter of the year.

The result was $0.1 billion lower than the equivalent number a year earlier, HSBC said in its earnings release, and prompted a drop in the bank's shares in early trading. HSBC is Europe's largest bank by market value.

#### CREDIT LOSSES WEIGH ON THE QUARTER

In the earnings release published on its investor website, HSBC said the decrease reflected higher expected credit losses, an adverse impact from notable items and a rise in operating expenses. Expected credit losses are the accounting mechanism through which banks provision for potential loan losses, capturing both actual defaults and forward-looking assumptions about the economic outlook.

The Q1 disclosure shows that the group set aside $1.3 billion against potential credit losses, $0.4 billion more than a year earlier, including a $0.4 billion charge on a fraud-related UK securitisation exposure, which media reports linked to the collapse of mortgage lender Market Financial Solutions, and a $0.3 billion increase in allowances reflecting the Middle East conflict.

The $9.4 billion pre-tax figure is a reported number rather than an adjusted or underlying measure, and captures the full effect of provisioning and other items running through the profit and loss account during the first three months of the year.

#### SHARES FALL ON THE RELEASE

HSBC's shares fell about 6% after the results, Reuters reported, linking the fall to the surprise $400 million charge.

HSBC raised its 2026 guidance for expected credit losses to around 45 basis points of average gross loans, from around 40 basis points, and raised its banking net interest income guidance to around $46 billion.

HSBC has continued to reshape its portfolio: during the quarter it completed the sales of its UK life insurance business and its business in South Africa, and on 30 April 2026 it completed the sale of its retail banking business in Sri Lanka.