v3.26.1
Report of the directors financial review risk report (Tables)
 6 Months Ended
Jun. 30, 2026
Report Of The Directors Financial Review Risk Report [Abstract]  
Disclosure of credit risk
Summary of credit risk (excluding debt instruments measured at FVOCI) by stage distribution and ECL coverage by industry sector
Gross carrying/nominal amount1
Allowance for ECL
ECL coverage %
Stage 1
Stage 2
Stage 3
POCI2
Total
Stage 1
Stage 2
Stage 3
POCI2
Total
Stage 1
Stage 2
Stage 3
POCI2
Total
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
%
%
%
%
%
Loans and advances to customers at amortised cost
923,849
85,657
24,004
336
1,033,846
(1,282)
(2,397)
(7,986)
(76)
(11,741)
0.1
2.8
33.3
22.6
1.1
–  personal
455,230
22,871
3,911
—
482,012
(690)
(1,233)
(883)
—
(2,806)
0.2
5.4
22.6
—
0.6
–  corporate and commercial
369,336
58,416
18,958
143
446,853
(529)
(1,127)
(6,317)
(76)
(8,049)
0.1
1.9
33.3
53.1
1.8
–  non-bank financial institutions
99,283
4,370
1,135
193
104,981
(63)
(37)
(786)
—
(886)
0.1
0.8
69.3
—
0.8
Loans and advances to banks at amortised cost
110,258
280
1
—
110,539
(7)
(2)
(1)
—
(10)
—
0.7
100.0
—
—
Other financial assets measured at amortised cost
963,708
1,854
262
6
965,830
(93)
(19)
(45)
—
(157)
—
1.0
17.2
—
—
Loan and other credit-related commitments
757,187
20,282
944
4
778,417
(157)
(103)
(107)
—
(367)
—
0.5
11.3
—
—
–  personal
278,508
2,023
89
—
280,620
(20)
(5)
—
—
(25)
—
0.2
—
—
—
–  corporate and commercial
248,768
15,851
855
4
265,478
(125)
(94)
(107)
—
(326)
0.1
0.6
12.5
—
0.1
–  financial
229,911
2,408
—
—
232,319
(12)
(4)
—
—
(16)
—
0.2
—
—
—
Financial guarantees
16,825
1,802
257
—
18,884
(10)
(12)
(66)
—
(88)
0.1
0.7
25.7
—
0.5
–  personal
1,432
—
—
—
1,432
(1)
—
—
—
(1)
0.1
—
—
—
0.1
–  corporate and commercial
10,536
1,522
255
—
12,313
(8)
(12)
(66)
—
(86)
0.1
0.8
25.9
—
0.7
–  financial
4,857
280
2
—
5,139
(1)
—
—
—
(1)
—
—
—
—
—
At 30 Jun 2026
2,771,827
109,875
25,468
346
2,907,516
(1,549)
(2,533)
(8,205)
(76)
(12,363)
0.1
2.3
32.2
22.0
0.4
Loans and advances to customers at amortised cost
893,433
80,936
24,389
333
999,091
(1,201)
(2,318)
(7,097)
(76)
(10,692)
0.1
2.9
29.1
22.8
1.1
–  personal
446,696
23,887
3,945
—
474,528
(667)
(1,235)
(895)
—
(2,797)
0.1
5.2
22.7
—
0.6
–  corporate and commercial
349,763
54,636
19,966
140
424,505
(478)
(1,064)
(5,909)
(75)
(7,526)
0.1
1.9
29.6
53.6
1.8
–  non-bank financial institutions
96,974
2,413
478
193
100,058
(56)
(19)
(293)
(1)
(369)
0.1
0.8
61.3
0.5
0.4
Loans and advances to banks at amortised cost
108,336
132
1
—
108,469
(4)
(2)
(1)
—
(7)
—
1.5
100.0
—
—
Other financial assets measured at amortised cost
888,491
1,651
184
—
890,326
(76)
(11)
(42)
—
(129)
—
0.7
22.8
—
—
Loan and other credit-related commitments
669,648
20,488
652
4
690,792
(149)
(97)
(69)
—
(315)
—
0.5
10.6
—
—
–  personal
270,494
1,945
92
—
272,531
(22)
(5)
—
—
(27)
—
0.3
—
—
—
–  corporate and commercial
255,740
14,649
560
4
270,953
(115)
(88)
(69)
—
(272)
—
0.6
12.3
—
0.1
–  financial
143,414
3,894
—
—
147,308
(12)
(4)
—
—
(16)
—
0.1
—
—
—
Financial guarantees
15,913
1,371
192
—
17,476
(8)
(17)
(26)
—
(51)
0.1
1.2
13.5
—
0.3
–  personal
1,446
—
—
—
1,446
(1)
—
—
—
(1)
0.1
—
—
—
0.1
–  corporate and commercial
10,071
1,287
190
—
11,548
(6)
(17)
(26)
—
(49)
0.1
1.3
13.7
—
0.4
–  financial
4,396
84
2
—
4,482
(1)
—
—
—
(1)
—
—
—
—
—
At 31 Dec 2025
2,575,821
104,578
25,418
337
2,706,154
(1,438)
(2,445)
(7,235)
(76)
(11,194)
0.1
2.3
28.5
22.6
0.4
1Represents the maximum amount at risk should the contracts be fully drawn upon and clients default.
2Purchased or originated credit-impaired (‘POCI‘).
Stage 2 days past due analysis
Gross carrying amount
Allowance for ECL
ECL coverage %
Stage 2
Up-to-
date
1 to 29
DPD1
30 and
> DPD1
Stage 2
Up-to-
date
1 to 29
DPD1
30 and
> DPD1
Stage 2
Up-to-
date
1 to 29
DPD
30 and >
DPD
At 30 Jun 2026
$m
$m
$m
$m
$m
$m
$m
$m
%
%
%
%
Loans and advances to
customers at amortised cost
85,657
82,087
2,225
1,345
(2,397)
(1,922)
(224)
(251)
2.8
2.3
10.1
18.7
–  personal
22,871
20,547
1,504
820
(1,233)
(815)
(188)
(230)
5.4
4.0
12.5
28.0
–  corporate and commercial
58,416
57,490
546
380
(1,127)
(1,070)
(36)
(21)
1.9
1.9
6.6
5.5
–  non-bank financial
institutions
4,370
4,050
175
145
(37)
(37)
—
—
0.8
0.9
—
—
Loans and advances to
banks at amortised cost
280
280
—
—
(2)
(2)
—
—
0.7
0.7
—
—
Other financial assets
measured at amortised cost
1,854
1,772
59
23
(19)
(16)
(2)
(1)
1.0
0.9
3.4
2.6
At 31 Dec 2025
Loans and advances to
customers at amortised cost
80,936
77,615
1,894
1,427
(2,318)
(1,837)
(211)
(270)
2.9
2.4
11.1
18.9
–  personal
23,887
21,481
1,483
923
(1,235)
(797)
(188)
(250)
5.2
3.7
12.7
27.1
–  corporate and commercial
54,636
53,898
400
338
(1,064)
(1,024)
(23)
(17)
1.9
1.9
5.8
5.0
–  non-bank financial
institutions
2,413
2,236
11
166
(19)
(16)
—
(3)
0.8
0.7
—
1.8
Loans and advances to
banks at amortised cost
132
132
—
—
(2)
(2)
—
—
1.5
1.5
—
—
Other financial assets
measured at amortised cost
1,651
1,611
21
19
(11)
(10)
—
(1)
0.7
0.6
—
5.3
1The DPD amounts are presented on a contractual basis.
Disclosure of macroeconomic variables and probabilities The following table describes key macroeconomic variables in the consensus Central scenario.
Consensus Central scenario
3Q26-2Q31 (as at 2Q26)
2026–2030 (as at 4Q25)
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
GDP (annual average growth rate, %)
2026
0.8
2.1
3.9
4.7
0.7
(0.7)
1.2
1.1
1.9
2.3
4.4
0.9
4.7
1.3
2027
1.2
2.0
2.6
4.4
0.9
7.2
1.8
1.4
2.0
2.3
4.2
1.2
4.1
2.0
2028
1.5
2.1
2.3
4.2
1.2
3.9
2.0
1.5
2.1
2.3
4.0
1.3
3.8
2.2
2029
1.5
2.1
2.2
4.1
1.2
3.7
2.1
1.5
2.1
2.4
3.8
1.3
3.5
2.2
2030
1.5
2.1
2.2
4.0
1.2
3.4
2.2
1.5
2.0
2.4
3.8
1.3
3.5
2.2
5-year average1
1.4
2.0
2.4
4.2
1.1
4.0
2.0
1.4
2.0
2.3
4.0
1.2
3.9
2.0
Unemployment rate (%)
2026
5.3
4.4
3.6
5.2
7.9
2.5
2.8
4.9
4.4
3.6
5.2
7.6
2.5
3.2
2027
5.2
4.4
3.4
5.1
7.8
2.2
3.0
4.7
4.3
3.4
5.2
7.6
2.4
3.2
2028
5.0
4.2
3.1
5.1
7.6
2.1
3.0
4.7
4.1
3.1
5.1
7.5
2.4
3.2
2029
4.8
4.2
3.0
5.0
7.5
2.1
3.0
4.7
4.1
3.0
5.0
7.4
2.4
3.1
2030
4.6
4.1
2.9
5.0
7.4
2.0
3.0
4.7
4.1
3.0
5.0
7.4
2.4
3.1
5-year average1
4.9
4.2
3.2
5.1
7.6
2.1
3.0
4.7
4.2
3.2
5.1
7.5
2.4
3.2
House prices (annual average growth rate, %)
2026
1.7
1.7
8.1
(5.1)
1.7
2.4
6.6
1.2
1.1
0.5
(1.6)
4.3
5.8
4.8
2027
1.6
1.7
4.2
0.1
4.4
0.4
4.3
2.8
1.9
1.5
2.1
5.0
3.2
4.5
2028
1.8
2.5
4.1
2.5
4.0
2.3
4.5
3.3
2.7
2.5
3.5
4.1
2.3
4.4
2029
2.4
2.8
3.7
3.1
3.1
2.0
4.3
2.7
3.2
2.1
3.4
3.1
2.0
4.3
2030
2.5
3.0
3.3
2.4
2.4
2.1
4.3
2.4
3.2
2.1
2.3
2.2
2.1
4.2
5-year average1
2.1
2.5
4.2
1.4
3.3
1.4
4.4
2.5
2.4
1.8
1.9
3.7
3.1
4.4
Inflation (annual average growth rate, %)
2026
3.2
3.4
1.9
1.0
2.0
2.9
4.0
2.5
2.9
1.8
0.7
1.4
2.0
3.7
2027
2.5
2.4
1.8
1.1
1.6
1.8
3.7
2.1
2.3
1.9
1.2
1.7
1.9
3.6
2028
2.0
2.2
2.0
1.4
1.7
1.9
3.5
2.1
2.2
2.0
1.4
2.1
1.9
3.5
2029
2.1
2.2
2.1
1.5
2.0
1.9
3.4
2.0
2.2
2.2
1.5
2.1
2.0
3.4
2030
2.0
2.2
2.2
1.6
1.9
1.8
3.5
2.0
2.2
2.2
1.5
1.9
2.0
3.4
5-year average1
2.3
2.4
2.0
1.4
1.9
1.9
3.6
2.2
2.4
2.0
1.3
1.9
1.9
3.5
Central bank policy rate (annual average, %)2
2026
3.9
3.7
4.1
3.0
2.3
3.7
6.8
3.5
3.4
3.8
3.0
1.9
3.5
7.0
2027
4.3
3.9
4.3
3.1
2.7
4.0
7.6
3.4
3.1
3.5
3.0
2.0
3.1
7.2
2028
4.1
3.9
4.3
3.1
2.6
3.9
8.3
3.5
3.2
3.6
3.1
2.1
3.3
7.5
2029
4.1
3.9
4.2
3.2
2.7
3.9
8.6
3.7
3.4
3.8
3.1
2.3
3.4
7.7
2030
4.2
3.9
4.3
3.3
2.8
4.0
8.7
3.8
3.6
3.9
3.2
2.5
3.6
7.9
5-year average1
4.2
3.9
4.3
3.2
2.7
3.9
8.2
3.6
3.3
3.7
3.1
2.2
3.4
7.5
1The five-year average is calculated over the 20 quarter projection. For the 2Q26 scenario this is from 3Q26 to 2Q31. For the 4Q25 scenario it is from 1Q26 to 4Q30.
2For the Chinese mainland, rate shown is the Loan Prime Rate.
Consensus Upside scenario (3Q26–2Q31)
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
GDP level (%, start-to-peak)1
11.4
(2Q31)
15.3
(2Q31)
19.3
(2Q31)
29.6
(2Q31)
8.1
(2Q31)
40.4
(2Q31)
16.6
(2Q31)
Unemployment rate (%, min)2
3.5
(2Q28)
3.6
(2Q28)
2.8
(2Q28)
4.7
(2Q28)
6.9
(2Q28)
1.8
(2Q28)
2.5
(1Q27)
House price index (%, start-to-peak)1
17.5
(2Q31)
23.3
(2Q31)
30.4
(2Q31)
12.5
(2Q31)
19.5
(2Q31)
18.3
(2Q31)
29.3
(2Q31)
Inflation rate (YoY % change, min)3
1.9
(4Q27)
1.0
(2Q27)
0.4
(2Q27)
0.0
(2Q27)
0.6
(2Q27)
1.4
(1Q27)
2.4
(2Q27)
Central bank policy rate (%, min)3
3.8
(3Q26)
3.6
(3Q26)
3.9
(3Q26)
2.9
(1Q27)
2.3
(3Q26)
3.6
(3Q26)
5.7
(4Q26)
Consensus Upside scenario 2026–2030 (as at 4Q25)
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
GDP level (%, start-to-peak)1
11.0
(4Q30)
15.2
(4Q30)
20.7
(4Q30)
28.6
(4Q30)
8.5
(4Q30)
29.0
(4Q30)
16.9
(4Q30)
Unemployment rate (%, min)2
3.2
(4Q27)
3.5
(4Q27)
2.8
(2Q28)
4.7
(4Q27)
6.6
(4Q27)
2.0
(4Q27)
2.8
(3Q26)
House price index (%, start-to-peak)1
20.0
(4Q30)
23.2
(4Q30)
19.4
(4Q30)
14.9
(4Q30)
22.6
(4Q30)
22.2
(4Q30)
29.5
(4Q30)
Inflation rate (YoY % change, max)3
3.5
(1Q26)
3.6
(3Q26)
2.9
(2Q26)
1.5
(4Q30)
2.4
(4Q27)
3.1
(2Q26)
4.2
(1Q26)
Central bank policy rate (%, max)3
3.9
(1Q26)
3.9
(1Q26)
4.2
(1Q26)
3.4
(1Q27)
2.5
(4Q30)
3.9
(1Q26)
8.1
(4Q30)
1Cumulative change to the highest level of the series during the 20-quarter projection.
2Lowest projected unemployment rate in the scenario.
3Lowest/highest projected policy rate and year-on-year percentage change in inflation in the scenario. For the Chinese mainland, the policy rate shown is the Loan
Prime Rate.
The following table describes key macroeconomic variables in the consensus Downside scenario.
Consensus Downside scenario (3Q26–2Q31)
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
GDP level (%, start-to-trough)1
(0.5)
(4Q26)
(0.6)
(1Q27)
(2.6)
(2Q28)
(1.9)
(4Q26)
(0.6)
(1Q27)
(1.5)
(3Q26)
(1.0)
(3Q27)
Unemployment rate (%, max)2
6.6
(2Q27)
5.3
(1Q27)
4.7
(2Q27)
6.7
(2Q28)
8.8
(1Q27)
3.0
(4Q26)
3.4
(2Q27)
House price index (%, start-to-trough)1
(4.4)
(3Q27)
(3.1)
(3Q27)
0.1
(4Q26)
(6.2)
(4Q27)
0.2
(3Q26)
(6.6)
(4Q26)
0.5
(3Q26)
Inflation rate (YoY % change, max)3
4.4
(4Q26)
4.7
(4Q26)
2.7
(2Q27)
2.5
(1Q27)
3.1
(4Q26)
3.4
(3Q26)
5.9
(2Q27)
Central bank policy rate (%, max)3
4.4
(1Q27)
4.2
(4Q26)
4.6
(4Q26)
3.4
(2Q31)
2.9
(3Q27)
4.2
(4Q26)
9.3
(1Q27)
Consensus Downside scenario 2026–2030 (as at 4Q25)
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
GDP level (%, start-to-trough)1
(0.2)
(2Q27)
(0.8)
(3Q26)
(1.7)
(4Q27)
(1.7)
(3Q26)
(0.4)
(3Q26)
0.4
(1Q26)
(1.0)
(1Q27)
Unemployment rate (%, max)2
6.2
(4Q26)
5.3
(3Q26)
4.8
(4Q26)
6.8
(4Q27)
8.6
(3Q26)
3.2
(3Q27)
3.8
(3Q26)
House price index (%, start-to-trough)1
(4.1)
(1Q27)
(3.1)
(1Q27)
(3.8)
(1Q27)
(5.6)
(1Q27)
0.7
(1Q26)
(3.4)
(2Q26)
0.6
(1Q26)
Inflation rate (YoY % change, min)3
1.3
(3Q26)
3.4
(1Q26)
0.1
(4Q26)
(2.9)
(4Q26)
0.4
(4Q26)
0.5
(4Q26)
4.7
(1Q26)
Central bank policy rate (%, min)3
2.2
(3Q28)
4.6
(2Q26)
5.0
(2Q26)
1.5
(4Q26)
0.6
(1Q27)
4.6
(2Q26)
9.5
(2Q26)
1Cumulative change to the lowest level of the series during the 20-quarter projection.
2The highest projected unemployment rate in the scenario.
3Lowest/highest projected policy rate and year-on-year percentage change in inflation in the scenario. For the Chinese mainland, the policy rate shown is the Loan
Prime Rate.
Downside 2 scenario (3Q26–2Q31)
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
GDP level (%, start-to-trough)1
(8.4)
(1Q28)
(5.5)
(1Q28)
(9.9)
(2Q28)
(9.3)
(4Q27)
(8.0)
(4Q27)
(10.4)
(4Q27)
(10.4)
(4Q27)
Unemployment rate (%, max)2
10.1
(2Q28)
10.6
(4Q28)
7.0
(2Q27)
6.9
(2Q28)
10.5
(1Q28)
4.6
(1Q27)
5.2
(4Q27)
House price index (%, start-to-trough)1
(34.0)
(3Q28)
(17.4)
(3Q27)
(11.6)
(3Q29)
(25.3)
(2Q28)
(11.3)
(2Q28)
(46.9)
(3Q28)
0.5
(3Q26)
Inflation rate (YoY % change, max)3
6.6
(4Q26)
5.2
(4Q26)
3.7
(4Q26)
2.7
(4Q26)
4.2
(1Q27)
3.9
(3Q26)
5.8
(1Q27)
Central bank policy rate (%, max)3
4.7
(4Q26)
4.5
(4Q26)
4.8
(4Q26)
3.5
(4Q26)
3.1
(4Q26)
4.5
(4Q26)
9.5
(4Q26)
Downside 2 scenario 2026–2030 (as at 4Q25)
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
GDP level (%, start-to-trough)1
(5.3)
(2Q27)
(4.5)
(1Q27)
(9.3)
(3Q27)
(6.0)
(1Q27)
(6.2)
(2Q27)
(5.7)
(2Q27)
(10.0)
(1Q27)
Unemployment rate (%, max)2
8.9
(2Q27)
9.0
(1Q28)
7.0
(4Q26)
7.0
(4Q27)
10.7
(4Q27)
3.9
(3Q26)
5.2
(2Q27)
House price index (%, start-to-trough)1
(24.2)
(4Q27)
(17.1)
(4Q26)
(19.6)
(2Q29)
(23.1)
(4Q27)
(5.9)
(3Q27)
(30.5)
(1Q28)
0.6
(1Q26)
Inflation rate (YoY % change, min)3
(1.9)
(4Q26)
4.1
(2Q26)
(1.7)
(2Q27)
(6.5)
(4Q26)
(0.6)
(4Q26)
0.3
(4Q26)
4.8
(1Q26)
Central bank policy rate (%, min)3
1.4
(1Q27)
4.7
(2Q26)
5.0
(2Q26)
1.2
(2Q27)
0.1
(4Q26)
4.7
(2Q26)
9.9
(2Q26)
1Cumulative change to the lowest level of the series during the 20-quarter projection.
2The highest projected unemployment rate in the scenario.
3 Lowest/highest projected policy rate and year-on-year percentage change in inflation in the scenario. For the Chinese mainland, the policy rate shown is the Loan
Prime Rate.
Scenario weightings, %
Standard
weights
UK
US
Hong
Kong
Chinese
mainland
France
UAE
Mexico
2Q26
Consensus Upside
10
5
5
5
5
5
5
5
Consensus Central
75
75
75
75
75
75
65
75
Consensus Downside
10
15
15
15
15
15
25
15
Downside 2
5
5
5
5
5
5
5
5
4Q25
Consensus Upside
10
10
10
10
10
10
10
10
Consensus Central
75
75
75
75
75
75
75
75
Consensus Downside
10
10
10
10
10
10
10
10
Downside 2
5
5
5
5
5
5
5
5
Wholesale IFRS 9 ECL sensitivity to future economic conditions1,2,3
By geography at
30 Jun 20265
Reported
Gross carrying
amount4
Reported
allowance
for ECL
Consensus Central
scenario allowance
for ECL
Consensus Upside
scenario allowance
for ECL
Consensus Downside
scenario allowance
for ECL
Downside 2
scenario allowance
for ECL
$m
$m
$m
$m
$m
$m
UK
463,607
681
621
527
796
1,657
US
216,936
165
144
112
214
610
Hong Kong
507,393
508
430
295
710
1,513
Chinese mainland
134,513
181
152
103
259
531
Mexico
39,710
59
54
41
68
124
UAE
67,950
120
91
85
172
356
France
197,768
120
112
95
140
245
Other geographies6
492,137
272
202
132
406
1,178
Total
2,120,017
2,105
1,807
1,390
2,764
6,214
of which:
Stage 1
1,978,717
799
656
474
968
1,233
Stage 2
141,299
1,307
1,151
916
1,797
4,981
By geography at
31 Dec 20255
UK
465,228
598
571
513
680
1,119
US
208,425
210
194
166
264
563
Hong Kong
472,454
439
401
305
570
1,143
Chinese mainland
133,814
188
176
137
256
397
Mexico
38,076
62
58
47
76
202
UAE
62,827
52
51
47
56
82
France
196,137
121
117
103
139
188
Other geographies6
487,987
234
208
158
358
790
Total
2,064,949
1,905
1,778
1,477
2,399
4,485
of which:
Stage 1
1,940,746
690
638
522
830
971
Stage 2
124,203
1,214
1,139
955
1,569
3,514
1Allowance for ECL sensitivity includes off-balance sheet financial instruments. These are subject to significant measurement uncertainty.
2Includes low credit-risk financial instruments such as debt instruments at FVOCI, which have high carrying amounts but low ECL under all the above scenarios.
3Excludes defaulted obligors. For a detailed breakdown of performing and non-performing wholesale portfolio exposures, see page 63.
4Staging refers only to probability-weighted/reported gross carrying amount. Stage allocation of gross exposures varies by scenario, with higher allocation to
stage 2 under the Downside 2 scenario.
5Geographies include all legal entities which share a common set of macroeconomic scenarios for the majority of exposures.
6Includes small portfolios that use less complex modelling approaches and are not sensitive to macroeconomic changes.
Retail IFRS 9 ECL sensitivity to future economic conditions1
At 30 Jun 2026
At 31 Dec 2025
By geography
Reported gross
carrying
amount
Reported
allowance
for ECL
Consensus
Central
scenario
allowance
for ECL
Consensus
Upside
scenario
allowance
for ECL
Consensus
Downside
scenario
allowance
for ECL
Downside 2
scenario
allowance
for ECL
Reported gross
carrying
amount
Reported
allowance
for ECL
Consensus
Central
scenario
allowance
for ECL
Consensus
Upside
scenario
allowance
for ECL
Consensus
Downside
scenario
allowance
for ECL
Downside 2
scenario
allowance
for ECL
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
UK
Mortgages
184,494
113
106
95
121
244
183,128
132
124
117
138
274
Credit cards
8,307
407
401
380
413
507
8,317
356
354
338
355
419
Other
9,706
293
282
257
306
463
9,513
265
261
238
276
370
Mexico
Mortgages
8,528
211
207
200
214
251
8,430
190
188
180
193
237
Credit cards
2,136
368
364
359
368
493
2,322
407
403
398
409
514
Other
3,290
411
411
408
414
565
3,727
437
437
435
442
589
Hong Kong
Mortgages
107,792
2
2
2
3
5
106,736
5
4
3
6
13
Credit cards
9,863
299
291
286
309
467
9,739
313
306
300
324
496
Other
6,269
146
146
142
148
169
6,085
146
137
136
144
173
UAE
Mortgages
2,436
12
11
11
12
22
2,306
6
6
6
6
7
Credit cards
557
55
50
49
63
89
591
39
39
38
40
46
Other
556
17
16
15
19
24
620
12
11
11
12
13
US
Mortgages
15,368
5
5
4
5
8
17,797
4
4
4
5
8
Credit cards
178
15
15
15
15
18
187
14
14
14
14
16
Other geographies
Mortgages
57,204
105
100
96
114
184
56,067
109
106
102
114
175
Credit cards
3,659
169
167
163
170
203
3,834
175
174
173
179
202
Other
2,299
79
78
78
80
91
2,313
78
78
77
78
85
Total
422,642
2,707
2,652
2,560
2,774
3,803
421,712
2,688
2,646
2,570
2,735
3,637
of which: mortgages
375,822
448
431
408
469
714
374,464
446
432
412
462
714
Stage 1
356,882
58
53
46
64
161
353,960
54
53
50
61
161
Stage 2
16,432
105
98
90
114
221
18,056
106
97
88
108
216
Stage 3
2,508
285
280
272
291
332
2,448
286
282
274
293
337
of which: credit cards
24,700
1,313
1,288
1,252
1,338
1,777
24,990
1,304
1,290
1,261
1,321
1,693
Stage 1
20,858
365
355
340
377
624
21,258
353
347
335
366
553
Stage 2
3,557
724
709
688
737
919
3,450
731
723
706
735
913
Stage 3
285
224
224
224
224
234
282
220
220
220
220
227
of which: others
22,120
946
933
900
967
1,312
22,258
938
924
897
952
1,230
Stage 1
19,136
256
250
233
267
495
19,494
253
249
233
265
444
Stage 2
2,378
411
404
388
421
525
2,177
403
393
382
405
494
Stage 3
606
279
279
279
279
292
587
282
282
282
282
292
1Allowance for ECL sensitivities includes defaulted obligors and excludes portfolios utilising less complex modelling approaches.
Downside scenario or the Downside 2 scenario at 30 June
2026, it would increase/(decrease) as presented in the below table.
Retail1
Wholesale1
Total Group ECL at 30 Jun 2026
$bn
$bn
Reported ECL
2.7
2.1
Scenarios
100% consensus Central scenario
(0.1)
(0.3)
100% consensus Upside scenario
(0.1)
(0.7)
100% consensus Downside scenario
0.1
0.7
100% Downside 2 scenario
1.1
4.1
Total Group ECL at 31 Dec 2025
Reported ECL
2.7
1.9
Scenarios
100% consensus Central scenario
(0.0)
0.0
100% consensus Upside scenario
(0.1)
(0.3)
100% consensus Downside scenario
0.0
0.6
100% Downside 2 scenario
0.9
2.7
1On the same basis as retail and wholesale sensitivity analysis.
Disclosure of reconciliation of changes in loss allowance
Management judgemental adjustments to ECL1
At 30 Jun 2026
At 31 Dec 2025
Retail
Wholesale2
Total
Retail
Wholesale2
Total
$bn
$bn
$bn
$bn
$bn
$bn
Modelled ECL (A)3
2.8
1.9
4.7
2.8
1.8
4.6
Banks, sovereigns, government entities and low-risk counterparties
0.0
Corporate lending adjustments
0.1
0.1
0.1
0.1
Other credit judgements
0.1
0.1
0.1
0.1
Total management judgemental adjustments (B)4
0.1
0.1
0.2
0.1
0.1
0.2
Other adjustments (C)5
0.0
0.1
0.1
(0.0)
0.1
0.1
Final ECL (A + B + C)6
2.9
2.1
5.0
2.9
2.0
4.9
1Management judgemental adjustments presented in the table reflect increases or (decreases) in allowance for ECL, respectively.
2The wholesale portfolio corresponds to adjustments to the performing portfolio (stage 1 and stage 2).
3(A) refers to probability-weighted allowance for ECL before any adjustments are applied.
4(B) refers to adjustments that are applied where management believes allowance for ECL does not sufficiently reflect the credit risk/expected credit losses of
any given portfolio at the reporting date. These can relate to risks or uncertainties that are not reflected in the model, and/or to any late-breaking events.
5(C) refers to adjustments to allowance for ECL made to address process limitations, data/model deficiencies, and can also include, where appropriate, the impact
of new models where governance has sufficiently progressed to allow an accurate estimate of ECL allowance to be incorporated into the total reported ECL. At
30 June 2026 a qualitative industry sector framework adjustment increased the wholesale portfolio allowance for ECL by $0.1bn.
6As presented within our internal credit risk governance (see page 140 of the Annual Report and Accounts 2025 on Form 20-F).
Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including
loan commitments and financial guarantees
Non-credit impaired
Credit impaired
Stage 1
Stage 2
Stage 3
POCI
Total
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
At 1 Jan 2026
1,611,996
(1,362)
102,889
(2,434)
25,234
(7,193)
337
(76)
1,740,456
(11,065)
Transfers of financial
instruments:
(29,667)
(335)
25,690
716
3,977
(381)
—
—
—
—
–  transfers from stage 1 to
stage 2
(68,168)
205
68,168
(205)
—
—
—
—
—
—
–  transfers from stage 2 to
stage 1
39,640
(515)
(39,640)
515
—
—
—
—
—
—
–  transfers to stage 3
(1,495)
7
(3,335)
500
4,830
(507)
—
—
—
—
–  transfers from stage 3
356
(32)
497
(94)
(853)
126
—
—
—
—
Net remeasurement of ECL
arising from transfer of stage
—
290
—
(307)
—
(58)
—
—
—
(75)
Changes due to modifications
not derecognised
—
—
—
—
(8)
2
—
—
(8)
2
Net new and further lending/
repayments
89,882
(99)
(19,543)
317
(2,488)
531
2
5
67,853
754
Changes to risk parameters –
credit quality
—
30
—
(781)
—
(2,344)
—
(4)
—
(3,099)
Changes to models used for
ECL calculation
—
3
—
(33)
—
6
—
—
—
(24)
Assets written off
—
—
—
—
(1,462)
1,462
—
—
(1,462)
1,462
Credit-related modifications
that resulted in derecognition
—
—
—
—
—
—
—
—
—
—
Foreign exchange and others1
(16,975)
17
(1,057)
8
(47)
(185)
1
(1)
(18,078)
(161)
At 30 Jun 2026
1,655,236
(1,456)
107,979
(2,514)
25,206
(8,160)
340
(76)
1,788,761
(12,206)
ECL income statement
change for the period
224
(804)
(1,863)
1
(2,442)
Recoveries
196
Others
(138)
Total ECL income statement
change for the period
(2,384)
1Total includes $4.7bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance
for ECL of $52m, reflecting planned business disposals as disclosed in Note 15 on page 100.
Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including loan
commitments and financial guarantees (continued)
At 30 Jun 2026
6 months ended 30 Jun 2026
Gross carrying/
nominal amount
Allowance
for ECL
ECL release/
(charge)
$m
$m
$m
As above
1,788,761
(12,206)
(2,384)
Other financial assets measured at amortised cost
965,830
(157)
(24)
Non-trading reverse purchase agreement commitments
152,925
—
—
Performance and other guarantees not considered for IFRS 9
—
—
54
Summary of financial instruments to which the impairment requirements
in IFRS 9 are applied – by business segment/Summary consolidated income
statement
2,907,516
(12,363)
(2,354)
Debt instruments measured at FVOCI
386,831
(29)
1
Total allowance for ECL/total income statement ECL change for the period
n/a
(12,392)
(2,353)
Non-credit impaired
Credit impaired
Stage 1
Stage 2
Stage 3
POCI
Total
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
Gross
carrying/
nominal
amount
Allowance
for ECL
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
At 1 Jan 2025
1,489,687
(1,232)
115,898
(2,674)
23,823
(6,148)
93
(51)
1,629,501
(10,105)
Transfers of financial
instruments:
(28,196)
(931)
18,327
2,101
9,869
(1,170)
—
—
—
—
–  transfers from stage 1 to
stage 2
(134,309)
368
134,309
(368)
—
—
—
—
—
—
–  transfers from stage 2 to
stage 1
107,223
(1,233)
(107,223)
1,233
—
—
—
—
—
—
–  transfers to stage 3
(1,873)
15
(10,260)
1,434
12,133
(1,449)
—
—
—
—
–  transfers from stage 3
763
(81)
1,501
(198)
(2,264)
279
—
—
—
—
Net remeasurement of ECL
arising from transfer of stage
—
664
—
(604)
—
(58)
—
—
—
2
Changes due to modifications
not derecognised
—
—
—
—
—
—
—
—
—
—
Net new and further
lending/repayments
107,733
(178)
(35,843)
614
(6,060)
768
238
2
66,068
1,206
Changes to risk parameters –
credit quality
—
390
—
(1,991)
—
(3,737)
—
(24)
—
(5,362)
Changes to models used for
ECL calculation
—
(59)
—
272
—
(16)
—
—
—
197
Assets written off
—
—
—
—
(3,569)
3,569
—
—
(3,569)
3,569
Credit-related modifications
that resulted in derecognition
—
—
—
—
(88)
9
—
—
(88)
9
Foreign exchange and
others1,2
42,772
(16)
4,507
(152)
1,259
(410)
6
(3)
48,544
(581)
At 31 Dec 2025
1,611,996
(1,362)
102,889
(2,434)
25,234
(7,193)
337
(76)
1,740,456
(11,065)
ECL income statement
change for the period
817
(1,709)
(3,043)
(22)
(3,957)
Recoveries
320
Other
(248)
Total ECL income statement
change for the period2
(3,885)
1Total includes $6.0bn of gross carrying loans and advances to customers and banks, which were classified to assets held for sale, and a corresponding allowance
for ECL of $27m, including business disposals as disclosed in Note 23 ‘Assets held for sale and liabilities of disposal groups held for sale’ on page 355 of the
Annual Report and Accounts 2025 on Form 20-F.
2This includes $7.2bn of gross carrying loans and advances to customers and corresponding allowance for ECL of $7m in relation to disposal of our retained
portfolio of home and other retail loans in France, as disclosed in Note 23 on page 355 of the Annual Report and Accounts 2025 on Form 20-F.
Reconciliation of changes in gross carrying/nominal amount and allowances for loans and advances to banks and customers including
loan commitments and financial guarantees (continued)
At 31 Dec 2025
12 months ended 31 Dec 2025
Gross carrying/
nominal amount
Allowance
for ECL
ECL
charge
$m
$m
$m
As above
1,740,456
(11,065)
(3,885)
Other financial assets measured at amortised cost
890,326
(129)
(29)
Non-trading reverse purchase agreement commitments
75,372
—
—
Performance and other guarantees not considered for IFRS 9
—
—
46
Summary of financial instruments to which the impairment requirements in
IFRS 9 are applied – by business segment/Summary consolidated income
statement
2,706,154
(11,194)
(3,868)
Debt instruments measured at FVOCI
383,568
(30)
18
Total allowance for ECL/total income statement ECL change for the period
n/a
(11,224)
(3,850)
Distribution of financial instruments to which the impairment requirements in IFRS 9 are applied, by credit quality and stage allocation
At 30 Jun 2026
At 31 Dec 2025
Gross carrying/nominal amount
Allowance
for ECL
Net
Gross carrying/nominal amount
Allowance
for ECL
Net
Strong
Good
Satisfactory
Sub-
standard
Credit
impaired
Total
Strong
Good
Satisfactory
Sub-
standard
Credit
impaired
Total
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Loans and advances to
customers at amortised
cost
563,194
224,358
200,344
21,803
24,147
1,033,846
(11,741)
1,022,105
545,487
215,781
191,839
21,455
24,529
999,091
(10,692)
988,399
–  stage 1
554,004
203,968
160,189
5,688
—
923,849
(1,282)
922,567
540,253
194,680
152,578
5,922
—
893,433
(1,201)
892,232
–  stage 2
9,190
20,390
39,962
16,115
—
85,657
(2,397)
83,260
5,234
21,101
39,068
15,533
—
80,936
(2,318)
78,618
–  stage 3
—
—
—
—
24,004
24,004
(7,986)
16,018
—
—
—
—
24,389
24,389
(7,097)
17,292
–  POCI
—
—
193
—
143
336
(76)
260
—
—
193
—
140
333
(76)
257
Loans and advances to
banks at amortised cost
99,313
5,991
5,162
72
1
110,539
(10)
110,529
97,524
6,222
4,613
109
1
108,469
(7)
108,462
–  stage 1
99,183
5,972
5,033
70
—
110,258
(7)
110,251
97,426
6,215
4,608
87
—
108,336
(4)
108,332
–  stage 2
130
19
129
2
—
280
(2)
278
98
7
5
22
—
132
(2)
130
–  stage 3
—
—
—
—
1
1
(1)
—
—
—
—
—
1
1
(1)
—
–  POCI
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Other financial assets
measured at amortised
cost
836,063
93,151
35,959
389
268
965,830
(157)
965,673
746,697
94,241
48,865
339
184
890,326
(129)
890,197
–  stage 1
835,833
92,403
35,200
272
—
963,708
(93)
963,615
746,536
93,759
48,121
75
—
888,491
(76)
888,415
–  stage 2
230
748
759
117
—
1,854
(19)
1,835
161
482
744
264
—
1,651
(11)
1,640
–  stage 3
—
—
—
—
262
262
(45)
217
—
—
—
—
184
184
(42)
142
–  POCI
—
—
—
—
6
6
—
6
—
—
—
—
—
—
—
—
Loan and other credit-
related commitments
499,711
168,705
100,155
8,898
948
778,417
(367)
778,050
441,740
146,923
91,400
10,073
656
690,792
(315)
690,477
–  stage 1
496,331
164,590
91,296
4,970
—
757,187
(157)
757,030
437,973
143,849
82,145
5,681
—
669,648
(149)
669,499
–  stage 2
3,380
4,115
8,859
3,928
—
20,282
(103)
20,179
3,767
3,074
9,255
4,392
—
20,488
(97)
20,391
–  stage 3
—
—
—
—
944
944
(107)
837
—
—
—
—
652
652
(69)
583
–  POCI
—
—
—
—
4
4
—
4
—
—
—
—
4
4
—
4
Financial guarantees
8,444
3,931
5,668
584
257
18,884
(88)
18,796
7,436
4,145
5,144
559
192
17,476
(51)
17,425
–  stage 1
8,386
3,785
4,514
140
—
16,825
(10)
16,815
7,430
4,040
4,351
92
—
15,913
(8)
15,905
–  stage 2
58
146
1,154
444
—
1,802
(12)
1,790
6
105
793
467
—
1,371
(17)
1,354
–  stage 3
—
—
—
—
257
257
(66)
191
—
—
—
—
192
192
(26)
166
–  POCI
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
2,006,725
496,136
347,288
31,746
25,621
2,907,516
(12,363)
2,895,153
1,838,884
467,312
341,861
32,535
25,562
2,706,154
(11,194)
2,694,960
Debt instruments at
FVOCI1
–  stage 1
378,772
5,839
6,085
64
—
390,760
(27)
390,733
375,894
2,592
7,015
3
—
385,504
(28)
385,476
–  stage 2
55
8
449
142
—
654
(2)
652
56
—
557
283
—
896
(2)
894
–  stage 3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
–  POCI
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
378,827
5,847
6,534
206
—
391,414
(29)
391,385
375,950
2,592
7,572
286
—
386,400
(30)
386,370
1For the purposes of this disclosure, gross carrying value is defined as the amortised cost of a financial asset, before adjusting for any loss allowance. As such, the gross carrying value of debt instruments at FVOCI will not reconcile to the
balance sheet as it excludes fair value gains and losses.
Disclosure of compliance with regulatory capital requirements under banking regulations
Own funds disclosure
30 Jun 2026
31 Dec 2025
Ref*
$m
$m
6
Common equity tier 1 capital before regulatory adjustments
167,958
172,987
28
Total regulatory adjustments to common equity tier 1
(40,266)
(40,394)
29
Common equity tier 1 capital
127,692
132,593
36
Additional tier 1 capital before regulatory adjustments
23,722
20,874
43
Total regulatory adjustments to additional tier 1 capital
(70)
(70)
44
Additional tier 1 capital
23,652
20,804
45
Tier 1 capital
151,344
153,397
51
Tier 2 capital before regulatory adjustments
29,142
30,167
57
Total regulatory adjustments to tier 2 capital
(1,710)
(1,193)
58
Tier 2 capital
27,432
28,974
59
Total capital
178,776
182,371
Capital ratios
%
%
61
Common equity tier 1 ratio
14.1
14.9
62
Tier 1 ratio
16.7
17.3
63
Total capital ratio
19.7
20.5
*These are references to lines prescribed in the Pillar 3 ‘Own funds disclosure’ template.
Disclosure of value at risk
Non-trading VaR, 99% 10 day
Interest
rate
Credit
spread
Portfolio
diversification1
Total2
$m
$m
$m
$m
Half-year to 30 Jun 2026
427.3
144.9
(92.6)
479.5
Average
464.8
148.1
(106.3)
506.6
Maximum
518.7
155.8
581.0
Minimum
415.8
141.5
449.1
Half-year to 30 Jun 2025
446.6
217.5
(118.8)
545.3
Average
455.4
207.1
(126.7)
535.8
Maximum
575.3
240.0
617.5
Minimum
378.9
181.3
458.0
Half year to 31 Dec 2025
499.6
149.6
(102.5)
546.6
Average
474.6
175.1
(105.4)
544.4
Maximum
525.2
254.6
588.4
Minimum
419.8
93.9
482.7
1Portfolio diversification is the market risk dispersion effect of holding a portfolio containing different risk types. It represents the reduction in unsystematic
market risk that occurs when combining a number of different risk types – such as interest rate and credit spreads – together in one portfolio. It is measured as
the difference between the sum of the VaR by individual risk type and the combined total VaR. A negative number represents the benefit of portfolio
diversification. As the maximum and minimum occurs on different days for different risk types, it is not meaningful to calculate a portfolio diversification benefit
for these measures.
2The total VaR is non-additive across risk types due to diversification effects.
Trading VaR, 99% 1 day
Foreign exchange
and commodity
Interest
rate
Equity
Credit
spread
Portfolio
diversification1
Total2
$m
$m
$m
$m
$m
$m
Half-year to 30 Jun 2026
10.9
28.3
22.8
8.6
(20.6)
50.0
Average
17.0
26.5
17.1
10.0
(27.9)
42.7
Maximum
31.2
36.7
22.8
16.1
58.4
Minimum
10.9
18.2
14.0
6.2
31.5
Half-year to 30 Jun 2025
11.2
20.5
18.2
13.1
(28.3)
34.6
Average
14.7
31.4
15.6
11.3
(34.3)
38.8
Maximum
26.9
54.9
20.9
17.9
57.1
Minimum
7.0
18.7
12.3
6.4
27.3
Half-year to 31 Dec 2025
13.9
18.9
17.1
8.5
(19.5)
38.9
Average
12.6
23.9
17.0
9.0
(24.1)
38.3
Maximum
21.7
32.1
24.6
15.4
50.3
Minimum
6.2
17.1
13.5
6.4
32.3
1See page 75 for our definition of portfolio diversification.
2The total VaR is non-additive across risk types due to diversification effects.
Additional information about insurance contracts
Balance sheet of insurance manufacturing subsidiaries by type of contract
Life direct
participating
and investment
DPF contracts
Life other
contracts
Other
contracts
Shareholder
assets
and liabilities
Total
$m
$m
$m
$m
$m
Financial assets
115,233
5,704
5,538
5,984
132,459
–  financial assets designated and otherwise mandatorily measured at
fair value through profit or loss
109,463
5,350
4,217
58
119,088
–  derivatives
126
12
4
4
146
–  financial investments – at amortised cost
579
122
1,002
4,165
5,868
–  financial assets at fair value through other comprehensive income
—
—
6
187
193
–  other financial assets
5,065
220
309
1,570
7,164
Insurance contract assets
—
92
—
—
92
Reinsurance contract assets
—
8,302
—
—
8,302
Assets held for sale1
10,832
329
196
221
11,578
Other assets and investment properties
1,740
64
37
2,910
4,751
Total assets at 30 Jun 2026
127,805
14,491
5,771
9,115
157,182
Liabilities under investment contracts designated at fair value
—
—
5,113
—
5,113
Insurance contract liabilities
123,261
5,298
—
—
128,559
Reinsurance contract liabilities
—
343
—
—
343
Liabilities of disposal groups held for sale1
10,340
476
—
456
11,272
Other liabilities
—
—
—
5,609
5,609
Total liabilities
133,601
6,117
5,113
6,065
150,896
Total equity
—
—
—
6,286
6,286
Total liabilities and equity at 30 Jun 2026
133,601
6,117
5,113
12,351
157,182
Financial assets
111,078
5,277
5,672
5,405
127,432
–  financial assets designated and otherwise mandatorily measured at
fair value through profit or loss
106,705
4,984
4,337
579
116,605
–  derivatives
136
8
—
—
144
–  financial investments – at amortised cost
609
115
1,010
3,654
5,388
–  financial assets at fair value through other comprehensive income
—
—
3
214
217
–  other financial assets
3,628
170
322
958
5,078
Insurance contract assets
12
98
—
—
110
Reinsurance contract assets
—
5,948
—
—
5,948
Assets held for sale1
4,748
258
1,347
271
6,624
Other assets and investment properties
1,785
118
45
2,696
4,644
Total assets at 31 Dec 2025
117,623
11,699
7,064
8,372
144,758
Liabilities under investment contracts designated at fair value
—
—
5,288
—
5,288
Insurance contract liabilities
117,107
4,761
—
—
121,868
Reinsurance contract liabilities
—
680
—
—
680
Liabilities of disposal groups held for sale1
4,734
234
—
1,418
6,386
Other liabilities
—
—
—
3,821
3,821
Total liabilities
121,841
5,675
5,288
5,239
138,043
Total equity
—
—
—
6,715
6,715
Total liabilities and equity at 31 Dec 2025
121,841
5,675
5,288
11,954
144,758
1HSBC Life (Singapore) Pte. Ltd. and HSBC Life Assurance (Malta) Ltd. are classified as held for sale at 30 June 2026. HSBC Life (UK) Limited was classified as
held for sale at 31 December 2025.
ÑFurther details are provided on page 100.