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It’s no secret that dividend-paying companies are the cornerstone of a passive income investment strategy. But that doesn’t mean the highest yielders are always the best options.
Data from Computershare’s UK Dividend Monitor reveals that HSBC (LSE: HSBA) paid out more dividends in 2025 than any other company. This is despite the bank’s dividend yield averaging only 5%-6% throughout the year.
Why did this happen? Because the bank’s so trusted that it’s one of the most popular picks among income investors.
Why HSBC stands out for income
HSBC has a long history of being one of the most dependable dividend payers on the London Stock Exchange.
It’s one of the oldest and largest banks in the UK, with a global footprint stretching from London to Hong Kong and beyond. For decades, it’s been a magnet for incomeâfocused investors because it consistently pays out billions of pounds in dividends every year.
Even during tough periods such as the global financial crisis or the postâpandemic slowdown, it usually kept its dividend intact, or cut it only once and then rebuilt it steadily over time.
Lately, the bank’s been simplifying its operations and focusing on its strong Asian and UK franchises, which has helped it grow revenue and maintain a solid balance sheet. In 2025, it reported revenue up around 7.5% year on year, helped by higher interest rate environments in key markets and a tighter cost structure.
This resilience is exactly what incomeâminded investors look for: a business that can keep earning even when the headlines are grim.
Financials and risks
From a numbers standpoint, HSBC looks like a typical, largeâcap income stock:
- Revenue growth of about 7.5% year on year shows the bank’s still expanding its lending and feeâbased businesses.
- Net margin around 29.5% indicates that, after all costs, it keeps a healthy slice of what it earns.
- Dividend payout ratio of about 61% means HSBC’s paying out a bit over half of its profits to shareholders, leaving room to reinvest and withstand downturns.
On the risk side, it faces typical bank risks: exposure to interestârate swings, creditâloss cycles, and geopolitical tensions — especially in Asia.
It also faces regulatory pressure and competition from fintech firms. That’s why dividends are never guaranteed. Even blueâchip banks can cut or suspend payouts if conditions take a turn for the worse.
A role in a diversified income portfolio
For a novice investor, it makes sense to consider HSBC as part of a wider income portfolio. Sure, it doesn’t always offer the highest yield — but it benefits from scale, stability, and a long dividend history.
Compared to higher-yielding, riskier stocks, it’ll help ensure your income stream is more predictable.Â
The key is risk management and diversification. Holding several dividendâpaying companies across different sectors reduces the damage if one cuts its payout.
Market downturns can be scary, but if you focus on highâquality businesses (and think in decades rather than months), you stand a better chance of achieving real, compounding income over time.
And itâs not unique in that sense â in recent months Iâve covered several other quality FTSE 100 stocks that are equally as attractive for income.
The post How did HSBC pay more passive income via dividends in 2025 than any other British company? appeared first on The Motley Fool UK.
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HSBC Holdings is an advertising partner of Motley Fool Money. Mark Hartley has positions in HSBC Holdings. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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