Europe’s biggest lender HSBC suffered a 29 per cent annual hit to profit in the second quarter of the year after a hefty impairment charge related to business in China.

The FTSE 100 juggernaut posted a $6.3bn (£4.72bn) pre-tax profit, missing analyst expectations of $6.99bn. This came as the lender recorded a $2.1bn write-down for its stake in China’s Bank of Communications.

The figure trumped previous expectations of a $1.6bn loss, following the Bank of Communication’s plans to raise up to ¥120bn (£12.5bn) by issuing new shares, which would reduce HSBC’s ownership to 16 per cent from 19 per cent.

Elsewhere, headline revenue took a nine per cent hit, which the firm said was due to the impact of notable items from disposals in Canada and Argentina. Excluding notable items, revenue rose $1.9bn to $35.4bn. This came after a strong performance in wealth and equity markets.

The bank’s international wealth and premier banking arm rose 13.2 per cent to over $2bn as the lender continues centre focus on private credit and wealth. In London, the bank opened a new wealth centre earlier this year designed for Premier and private bank clients to meet with relationship managers on an invite-only basis and receive a stand-out, personalised wealth management service.

Operating expenses jumped four per cent year-on-year to $17bn on the back of “restructuring and other related costs associated with organisational simplification”. Chief executive Georges Elhedery has laid out ambitions to achieve $1.5bn in annualised cost savings by 2027, which has cost the bank $0.6bn so far in 2025.

The bank said saving plans remain “on track”.

HSBC maintains UK grip

In the UK, the bank recorded a bumper first-half.

Britain’s biggest lender took home $3.6bn for the first six months of the year, as its UK arm’s profit jumped over 22 per cent.