HSBC has recorded a "messy set of results" in the second quarter according to one analyst, after its pre-tax profit fell by 29% year-on-year to $6.3bn.

The bank said that this drop was due to the recognition of dilution and $2.1bn in impairment losses in BoCom.

In the three months to 30 June, its revenue dropped by $100m to $16.5bn, reflecting the impact of previously mentioned items, while its operating expenses increased by 10% to $8.9bn as a result of restructuring and other related costs associated with "organisational simplification".

In the six months to 30 June, HSBC’s profit before tax dropped by 26.5% to $15.8bn, while its revenue fell by 9% year-on-year to $34.1bn.

Furthermore, its return on average tangible equity (RoTE) in the first half of its financial year fell from 21.4% in H1 2024 to 14.7%.

Group chief executive officer at HSBC, Georges Elhedery, said: "We're making positive progress in becoming a simple, more agile, focused organisation built on our core strengths. In the first half, we continued to execute our strategy with discipline and each of our four businesses sustained momentum in their earnings with each growing revenue. This gives us confidence in our ability to deliver our targets.”

Looking ahead, HSBC said that it is continuing to operating in a "global environment characterised by constant change and uncertainty", but that it is well positioned to manage the impact of these challenges.

It stated that it is continuing to target a RoTE in the mid-teen between 2025 and 2027, adding that it remains on track to deliver growth in its basis operating expenses in 2025, which remained at 3% compared to 2024.

However, HSBC added that it expects demand for lending to remain muted in 2025, but this is set to reach mid-single digit percentage growth for year-on-year customer lending balances in the mid- to long-term.

Senior equity analyst at Hargreaves Lansdown, Matt Britzman, described the latest update from the bank as as "another quarter, another messy set of results".

He concluded: "Headline numbers have, once again, been skewed by one-off items, and the 29% drop in second-quarter profit before tax is a poor measure of performance. HSBC took a $2.1bn hit due to the accounting impact of dilution and impairment in its Chinese bank holding - not for the first time - but these do not affect capital levels. Underlying performance was far more encouraging, with pre-tax profit coming in comfortably ahead of consensus, driven by strong growth in wealth management.

"Capital levels remain robust enough to support another $3bn buyback, but the medium-term outlook is murky. While guidance was technically unchanged, it came with caveats. Tariffs are a concern, not necessarily due to their direct impact, but because of the potential for broader economic pressure. Management included a subtle warning that suggests some unease about the road ahead.

"Still, the outlook for HSBC is a lot muddier than some of its UK-focused peers like NatWest and Lloyds, where the path to earnings growth is much clearer."

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