HSBC Holdings has set a goal to cut costs by $1.8 billion by the end of 2026, as its new CEO Georges Elhedery aims to boost returns and enhance efficiency at the bank. The Asia-focused lender reported a profit before tax of $32.3 billion in 2024, beating market expectations.
Elhedery has been working to revamp HSBC’s business model since becoming CEO in September and announced plans to cut costs by $300 million in 2025 and another $1.5 billion by the end of 2026. The bank also announced a new $2 billion share buyback program, which will be completed before its next earnings filing.
HSBC’s cost-cutting measures include reducing staff bonuses by 8% over 2025 and 2026, with a focus on optimizing resource allocation across geographical regions, business lines, and the balance sheet. The bank aims to achieve a mid-teens return on equity for each year from 2025 to 2027.
The announcement comes as HSBC navigates mixed interest rate policies and geopolitical changes, including heightened tensions between China and the US. Elhedery’s efforts to boost returns and intensify the bank’s focus on Asia are seen as positive signs for investors.
HSBC’s Hong Kong-listed shares rose by as much as 1.8% after the earnings announcement, marking their highest level since February 2011. The broader market was down 0.4%.
Source: https://www.reuters.com/business/finance/hsbc-books-66-rise-annual-profit-beats-estimates-2025-02-19