HSBC announces share buyback of up to $2 billion as annual profit jumps 6.5%

Europe’s largest lender HSBC on Wednesday announced a share buyback of up to $2 billion as its annual pre-tax profit rose 6.5%, helped by the sale of its banking business in Canada.

For the full year, HSBC reported revenue of $65.85 billion, down from $66.1 billion in 2023.

Here are HSBC’s full-year results compared with LSEG mean estimates:

• Pre-tax profit: $32.31 billion vs. $32.63 billion
• Revenue: $65.85 billion vs. $66.52 billion

While the profit before tax marginally missed LSEG estimates, it was higher than the $31.67 billion consensus estimate compiled by the bank.

The bank’s profit before tax for the fourth quarter nearly doubled from a year earlier to $2.3 billion — the lender had incurred an impairment charge of $3 billion in fourth quarter last year impacting its performance. Revenue for the reported quarter declined 11% to $2.3 billion.

HSBC said it expects to complete the announced share buyback by the end of their first quarter of 2025.

HSBC’s buyback is in line with market expectations, said Morningstar’s equity research analyst Michael Makdad, adding that plans to trim costs over 2025 and 2026 were a positive.

The bank in its statement said it would cuts costs by an annualized $1.5 billion by the end of 2026.

HSBC forecast banking net interest income of $42 billion in 2025 compared with $43.7 billion in 2024.

These are the lender’s first full-year results after Georges Elhedery was appointed the CEO of the London-headquartered bank in July last year, following the retirement of Noel Quinn.

Hong Kong-listed shares of the bank dipped 0.29% following the earnings release.

On Tuesday, HSBC dismissed about 40 investment bankers in Hong Kong, Reuters reported. The sectors hit hardest are reportedly M&A, consumer, real estate and resources and energy.

Last October, the bank revealed plans to reorganize its business into four units, separating its operations into an “Eastern markets” sector and a “Western markets” division.

“We are creating a simple, more agile, focused bank built on our core strengths … This includes creating four complementary, clearly differentiated businesses, aligning our structure to our strategy and reshaping our portfolio at pace and with purpose,” Elhedery said.

The bank said in its statement that the reorganization will generate about $300 million in cost reductions in 2025.