The chief executive of HSBC has signalled that his planned overhaul of Europe’s largest lender is drawing to a close despite a slide in annual profits.
The bank’s chief executive, Georges Elhedery – who took over in 2024 – said it was “becoming a simple, more agile, focused bank built for a fast-changing world”.
Buffeted by $4.9bn (£3.6bn) in one-off charges, HSBC’s pre-tax profit slipped 7% to $29.9bn last year. That was, however, about $1bn ahead of what City analysts had forecast and came after an unusually strong 2024.
HSBC said it was raising its target for return on tangible equity, a key measure of profitability for banks, to “17% or better” through 2028, up from its “mid-teens” target set for the three years through 2027. Last year it came in at 13.3%.
The bank’s Hong Kong-listed shares rose 2.5% after the results.
Charges incurred last year included a $2.1bn write-off related to its holdings in China’s Bank of Communications, which had been hurt in part by the long downturn in China’s property sector.
That led to pre-tax profit for its mainland China business tumbling 66% to $1.1bn.
The bank also logged legal provisions worth $1.4bn as well as $1bn of restructuring and related costs.
Elhedery, a career HSBC veteran, has shaken up the bank since assuming the chief executive role one and a half years ago by reorganising operating divisions along east-west lines, shedding smaller investment banking units in the US and Europe, and slashing the ranks of senior managers.
The bank initiated 11 exits from various businesses across the globe last year.
Those efforts helped its London-listed stock soar by 50% in 2025 and it has climbed another 10% for the year to date to give the bank a market value of about $300bn.
HSBC took subsidiary Hang Seng Bank private in a $13.7bn deal last year. It said on Wednesday that their combined banking operations would target $900m in pre-tax revenue and cost synergies by the end of 2028, but there would also be some $600m restructuring costs.
The bank also 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 £6.6m in total pay in 2025, up 18% from a year earlier.
Analysts at Jefferies said investors were likely to welcome the strong results but may question its forecast of just a 1% rise in costs for 2026 given the competitive environment and need to invest in AI technology.
In December, HSBC appointed the former KPMG partner Brendan Nelson as its chair after a prolonged search process that left it without a permanent executive in the top role for months.
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