HSBC Holdings (0005) reported a 7 percent drop in full-year pretax profit on Wednesday, hurt by US$4.9 billion (HK$38.22 billion) of one-off charges, but it lifted a key earnings target now that most of a planned business overhaul has been completed.
Chief Executive Georges Elhedery said in a statement that the bank had acted decisively last year.
"We are becoming a simple, more agile, focused bank built for a fast-changing world."
Europe's largest bank posted a pretax profit of US$29.9billion last year, slightly ahead of the US$28.9 billion average of broker estimates compiled by HSBC. The results come after an unusually strong 2024.
The charges included a US$2.1 billion write-off related to its holdings in China's Bank of Communication which had been hurt by dilution and the long downturn in China's property sector. There were also legal provisions worth US$1.4 billion as well as US$1 billion of restructuring and related costs.
HSBC said it was raising its target for return on tangible equity, a key profit metric for banks, to "17 percent or better" through 2028, up from its "mid-teens" target set for the three years through 2027.
Hong Kong-listed shares of HSBC climbed around 3 percent after the results.
Elhedery, a career HSBC veteran, has shaken up the bank since assuming the chief executive role one and a half years ago by reorganizing operating divisions along East-West lines, shedding sub-scale investment banking units in the U.S. and Europe, and slashing the ranks of senior managers.
All in all, the bank initiated 11 exits from various businesses across the globe last year.
Those efforts helped the bank's London-listed stock surge 50 percent in 2025, and it has climbed another 10 percent for the year to date to give the bank a market value of some US$300 billion.
HSBC took subsidiary Hang Seng Bank private in a US$13.7 billion deal last year. It said on Wednesday that their combined banking operations would target US$900 million in pre-tax revenue and cost synergies by the end of 2028, but there would also be some US$600 million restructuring costs.
The London-headquartered, Asia-focused bank has paused its share buyback program for three quarters following the Hang Seng deal to shore up capital.
The bank said it would pay a final dividend of 45 cents a share, adding to 30 cents granted earlier in the year. That was, however, below the 87 cents paid in total for 2024.
Elhedery received £6.6 million (HK$69.81 million) in total remuneration in 2025, up 18 percent from a year earlier.
Reuters
