HSBC boss signals overhaul of bank is almost over despite drop in profits

HSBC CEO Georges Elhedery announced that the bank's restructuring is nearing completion despite a 7% drop in annual pre-tax profits to $29.9 billion, attributed to $4.9 billion in one-off charges including a write-off from its stake in China's Bank of Communications. The bank aims to achieve a return on tangible equity of "17% or better" through 2028, up from its previous target. HSBC's Hong Kong-listed shares rose 2.5% following the results, which included a final dividend of 45 cents per share. Since Elhedery took over, HSBC has reorganized divisions, divested smaller units, and reduced senior management, leading to a 50% increase in its London-listed stock in 2025. The bank also took Hang Seng Bank private and anticipates $900 million in pre-tax revenue and cost synergies by the end of 2028.

HSBC Holdings reported a 7% decrease in pre-tax profit for 2025, falling to $29.9 billion due to legal provisions, losses related to Bank of Communications, restructuring costs, and bad debt. Despite the profit decline, which was anticipated by analysts, HSBC's shares rose on Wednesday following the announcement. The bank outlined goals for stronger returns and a sustainable dividend policy looking ahead to 2026. HSBC will pay a final dividend of 45 US cents per share, bringing the total annual payout to 75 US cents. As expected, the bank did not announce any share buy-backs.