HSBC Holdings (LSE: HSBA) has delivered one of the most remarkable performances of any FTSE 100 stock over the past five years, rising a staggering 330% with dividends on top.
The bank is now the UK’s biggest listed company by market capitalisation, sitting at a substantial £266bn and commanding a vast global footprint.
Despite its London listing, just 18% of HSBC’s revenue comes from the UK, with the bank’s most significant growth opportunity concentrated heavily across Asia.
Like most major banks, HSBC has benefited significantly from the higher interest rate environment, which helped widen net interest margins and drive exceptional profitability.
Pre-tax profits have climbed sharply in recent years, reaching $30.3bn in 2023 and $32.3bn in 2024, before dipping slightly to $29.9bn in 2025 due largely to one-off impairments.
Shares briefly fell 5% on 5 May following a 1% dip in Q1 reported profit before tax to £9.4bn, though revenue still grew 4% to $19.1bn in that period.
The second quarter delivered a far stronger set of numbers, with revenue rising 16% to $19.1bn while reported profit before tax jumped 60% to $10.1bn.
The board also restarted its share buyback programme, launching a new initiative worth up to $1bn after pausing buybacks to complete its acquisition of Hong Kong’s Hang Seng Bank.
That figure is notably below the $6bn of buybacks completed across 2025, though the resumption signals renewed confidence from HSBC’s leadership in the bank’s financial position.
Risks remain, including a troubled Chinese property market, Beijing’s clampdown on mainland Chinese residents investing in Hong Kong, and concerns surrounding the shadow banking system.
A broader global downturn could also weigh on revenues and drive up bad debts, adding a layer of uncertainty for investors considering entering at current price levels.
On valuation, HSBC trades at a trailing price-to-earnings ratio of around 17 times, with a trailing dividend yield that has shrunk to 3.6% as a result of its strong share price performance.
The forward P/E of 12.6 looks more attractive, and the forecast dividend yield stands at 4.1% for 2026 and 4.6% for 2027, offering a more compelling case for income-focused investors.
Broker consensus suggests caution at current levels, with the average one-year share price target sitting at around 1,520p, approximately 2.2% below the current price of 1,555p.
For patient investors with a long-term horizon, HSBC remains a credible candidate for both dividend income and share price growth, particularly if market volatility creates a more attractive entry point.