Company: HBCYF
Filing Date: 2025-10-28
Form Type: 6-K
Source: 0001654954-25-012267
Chunk: 51

Company: HSBC HOLDINGS PLC
Filing Date: 2025-10-28
Form: 6-K
Chunk 51
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bn impact from the sale of our French and UK life insurance businesses and $0.1bn from the sale of our private banking, custody and fund administration businesses in Germany.

Risk

Managing risk

Economic, financial and geopolitical developments have historically affected, and may in the future materially affect, HSBC's customers, operations and financial risk profile. We maintain a proactive approach to managing our exposure to these risks, supported by continuous monitoring and review.

In the first nine months of 2025, the global economy showed resilience and continued to grow despite unpredictable US trade policies, heightened geopolitical tensions and increased fiscal concerns in developed markets. Global GDP growth exceeded expectations, driven by export growth, related to front-loading of purchases to avoid US tariffs and a weaker US dollar, as well as government spending. Household consumption was more subdued due to weak confidence, higher unemployment and inflation concerns. US economic data was affected by tariffs and other domestic policies, but US GDP growth outperformed initial forecasts. In mainland China and Hong Kong, exports to markets in Asia and Latin America offset some of the impact of US tariffs, while supportive fiscal and monetary policies continued to underpin growth.

Trade and tariff policies are expected to remain a source of uncertainty for businesses and consumers, and economic forecasts predict only moderate rates of growth in our main markets in 2026. Changes to tariff rates, including the application of sector-specific levies, may deter capital investment and consumer spending, disrupt supply chains and reduce global trade growth. Although the reconfiguration of supply chains may offer new opportunities for investment and growth, such developments could also adversely affect the Group and our customers who operate in some of the most affected markets.

Despite heightened economic and policy uncertainty, financial markets have seen significant valuation gains, including in the artificial intelligence ('AI') and technology sectors. AI and the surge in related investment may lead to future gains to productivity and growth, but current high valuations raise the risk of a disruptive correction that could impact economic growth, which may in turn have an adverse effect on HSBC's risk profile and earnings.

We also remain subject to interest rate risk, which can affect net interest income, the fair value of our assets and liabilities, and overall financial performance.

In Hong Kong, our operations have been and continue to be exposed to fluctuations in HIBOR, which has experienced heightened volatility due to changing corporate cash demands and changing investor risk appetite.

Major central banks have adjusted their policy approach in response to changing inflation and employment risks. The US Federal Reserve resumed its cycle of interest rate cuts in September