HSBC Unveils $2 Billion Share Buyback as Annual Profit Rises 6.5%

HSBC, Europe's largest lender, announced a $2 billion share repurchase on Wednesday as its annual pre-tax earnings increased 6.5%, thanks to the sale of its Canadian banking division.

HSBC reported total revenue of $65.85 billion, a decrease from $66.1 billion in 2023.

Here are HSBC's full-year results compared to the LSEG mean estimates.

Pre-tax profit: $32.31 billion compared to $32.63 billion.

Revenue: $65.85 billion compared to $66.52 billion.

While profit before tax fell slightly short of LSEG projections, it exceeded the bank's average estimate of $31.67 billion.

The bank's earnings before tax for the fourth quarter nearly doubled from a year ago to $2.3 billion; the lender had incurred a $3 billion impairment charge in the fourth quarter of last year, which impacted its performance. Revenue for the reported quarter fell 11% to $2.3 billion.

HSBC aims to complete the stated share buyback by the end of the first quarter of 2025.

Morningstar's stock research analyst Michael Makdad said HSBC's buyback is in line with market expectations, and measures to cut expenses in 2025 and 2026 are encouraging.

According to the bank's statement, it plans to lower expenditures by $1.5 billion annually by the end of 2026.

Banking net interest income is expected to reach $42 billion in 2025, up from $43.7 billion in 2024, according to HSBC.

These are the lender's first full-year results since Georges Elhedery was appointed CEO of the London-based bank in July last year, following Noel Quinn's departure.

Following the earnings release, the bank's Hong Kong-listed shares fell 0.29%.

Reuters reported on Tuesday that HSBC fired approximately 40 investment bankers in Hong Kong. M&A, consumer, real estate, resources, and energy are considered the hardest-hit industries.

Last October, the bank announced plans to divide its operations into four groups, including 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 told reporters.

According to the bank's announcement, the restructuring will save approximately $300 million in costs by 2025.