The London-headquartered lender is months into a structural shakeup and cost-cutting as the sector is buffeted by volatility from US President Donald Trump's trade war.
"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," chief executive Georges Elhedery said in a Hong Kong stock exchange filing.
The bank said the US$5.7 billion drop in first-half pre-tax profit was "primarily due to the recognition of dilution and impairment losses of US$2.1 billion" related to China's Bank of Communications, which was recapitalised by the country's finance ministry this year.
First-half revenue declined nine percent to US$34.1 billion.
The bank announced a second interim dividend of $0.1 per share and another share buyback of up to US$3 billion.
"In total, we have announced US$9.5 billion in returns to our shareholders through dividends and share buybacks in the first half of 2025," Elhedery said.
He added that HSBC is "making positive progress" in its structural streamlining, which began in October.
Operating expenses in the first half rose four percent to US$17 billion, which the bank partly attributed to restructuring and related costs.
The bank generates most of its revenue in Asia and has spent several years pivoting to the region, vowing to develop its wealth business and target fast-growing markets.
Elhedery said HSBC is "well positioned to manage the changes and uncertainties prevalent within the global environment in which we operate, including in relation to tariffs".
"While we would expect the direct impact from tariffs to have a relatively modest impact on our revenue, the broader macroeconomic deterioration may see (return on tangible equity) excluding notable items fall outside of our mid-teens targeted range in future years," he said.
HSBC shares in Hong Kong fell 3.8 on Wednesday, while its London-listed stock was down more than four percent in the morning.
Morningstar senior equity analyst Michael Makdad said the bank "needs to make sure that shareholders in Asia remain on board with the strategic direction... centred on simplification and intensive cost-cutting, but without a radical overhaul of the entire business model".
Makdad added that its immediate challenge is to find a replacement for chair Mark Tucker, who will retire by the end of the year.
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