HSBC (NYSE:HSBC) plans to expand its U.K. commercial and retail businesses through digital investment and selective lending, while maintaining pricing discipline in a competitive deposit market, executives said at an investor breakfast.
David Lindberg, CEO of HSBC UK Bank, said the bank sees particular room to grow among middle-market companies and small businesses. In retail, where he said HSBC’s market share has slipped in recent years, the bank is investing in its app and customer service rather than pursuing growth at any price.
“We’re trying to grow value and we’re not chasing market share,” Lindberg said. He added that HSBC would weigh mortgage lending opportunities against corporate lending based on margins and available balance sheet capacity.
Commercial lending and customer growth
HSBC’s U.K. operating segment reported a 21.4% return on tangible equity and a 41% cost-to-income ratio, Lindberg said. He said U.K. revenue and customer loans each grew 7% year over year.
Within commercial banking, Lindberg identified middle-market companies as a priority. HSBC had added around 500 customers in that segment since the end of 2024, equivalent to about 8% of its existing customer base, he said. Middle-market lending rose 15% year over year.
HSBC ranks second in the U.K. middle market and fourth among smaller businesses, according to Lindberg. He said the bank had recently shortened onboarding times for most business banking customers to 24 hours from an average of about 30 days. New customer numbers in the segment rose 23% from a year earlier, helped by onboarding improvements, pricing and marketing, he said.
Lindberg said corporate customers were borrowing to invest in areas including artificial intelligence, automation, digitization and acquisitions. He described the corporate loan book as healthy, while noting that agriculture and homebuilding in London and the southeast had faced some pressures.
Deposits, margins and investment
Jon Bingham, HSBC’s group financial controller, said deposit competition increased during the third quarter. The bank has about half a trillion dollars in deposits across its U.K. franchise and does not need to chase deposits to fund current growth, he said.
Bingham said HSBC’s U.K. margin was broadly stable at the half year, rising to 2.66% from 2.62%. Overall lending was growing at 7%, while commercial lending was growing at 13% and typically carried higher margins, he said. That shift could offset some deposit-related pressure.
HSBC is investing in its retail app, business banking platform and mortgage systems. Lindberg said a move to a common mortgage platform would increase capacity and lower costs, and that customers would soon be able to receive mortgage approval in 15 minutes.
Bingham said he expected the U.K. cost-to-income ratio to remain relatively static over the medium term, as efficiency gains fund investment. Excluding notable items, the ratio was closer to 38%, he said.
Tax impact
Bingham also addressed the effect of U.K. tax and the banking surcharge on HSBC. He cited an ongoing annual impact of around $300 million and a one-off impact of about $100 million in 2026 from revaluing deferred tax liabilities.
About HSBC (NYSE:HSBC)
HSBC Holdings plc is a global banking and financial services company serving individuals, businesses, institutions and governments. Its services include personal and commercial banking, wealth management, private banking, and corporate and investment banking.
The company provides products such as deposit accounts, lending, payments, trade finance, foreign exchange and investment services. Its international network supports clients with cross-border banking and financial needs.
HSBC traces its origins to the Hongkong and Shanghai Banking Corporation, founded in 1865 to finance trade in Asia.
