Company: HBCYF
Filing Date: 2025-04-29
Form Type: 6-K
Source: 0001654954-25-004763
Chunk: 3

Company: HSBC HOLDINGS PLC
Filing Date: 2025-04-29
Form: 6-K
Chunk 3
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 top priority. The Group is well-positioned to manage the impacts of these challenges through our high-quality revenue streams, conservative approach to credit risk and strong deposit franchise.

- We continue to target a mid-teens return on average tangible equity ('RoTE') in each of the three years from 2025 to 2027 excluding notable items, and we continue to expect banking NII of around $42bn in 2025 based on our latest modelling, acknowledging the outlook for interest rates has become more volatile and uncertain.

- We expect ECL charges as a percentage of average gross loans of between 30bps to 40bps in 2025 (including loans held for sale balances).

- Our targeted growth in operating expenses in 2025 compared with 2024 remains approximately 3%, on a target basis. Our cost target includes the impact of simplification-related saves associated with our announced reorganisation, which aims to generate approximately $0.3bn of cost reductions in 2025, with a commitment to an annualised reduction of around $1.5bn in our cost base expected by the end of 2026. To deliver these reductions, we plan to incur severance and other up-front costs of $1.8bn over 2025 and 2026, which will be classified as notable items.

- Given current levels of uncertainty and market turmoil, we expect demand for lending to remain muted during 2025. However, over the medium to long term we continue to expect mid-single digit percentage growth for year-on-year customer lending balances. We continue to expect double-digit percentage average annual growth in fee and other income in Wealth over the medium term.

- We intend to manage the CET1 capital ratio within our medium-term target range of 14% to 14.5%, with a dividend payout ratio target basis of 50% for 2025, excluding material notable items and related impacts.

➢ Our targets and expectations reflect our current outlook for the global macroeconomic environment and market-dependent factors, such as market-implied interest rates (as of mid-April 2025) and rates of foreign exchange, as well as customer behaviour and activity levels.

➢ We do not reconcile our forward guidance on RoTE excluding the impact of notable items, target basis operating expenses, dividend payout ratio target basis or banking NII to their equivalent reported measures.

➢ For further details on our alternative performance measures, including their basis of preparation, see page 32 for RoTE excluding notable items, page 13 for