Hong Kong (Reuters) – HSBC has kicked off the year with a robust set of financial results, surpassing analyst expectations with a pre-tax profit of $32.3 billion for 2024. The strong earnings performance comes as the bank embarks on an ambitious restructuring drive under its new CEO, Georges Elhedery, who has wasted no time in reshaping HSBC’s strategic direction. As part of his cost-cutting agenda, Elhedery has set a goal of reducing the bank’s annual cost base by $1.5 billion by the end of 2026, marking one of the most significant efficiency drives in HSBC’s recent history.
Underpinning the restructuring plan is HSBC’s sharpened focus on Asia, where it derives the bulk of its profits. Since taking the helm in September last year, Elhedery has prioritized resource optimization, capital efficiency, and operational discipline. His approach reflects a broader shift in HSBC’s business model, as the bank seeks to strengthen its competitive edge in key Asian markets while streamlining operations in other regions.
The financial results indicate that HSBC is well-positioned to execute this transition. Revenue from the bank’s wealth and personal banking division, its largest profit driver, rose to $12.2 billion in 2024, up 5.2% from the previous year. Meanwhile, the global banking and markets division delivered a remarkable 27% increase in earnings, reaching $7.1 billion. These figures underscore the bank’s resilience in the face of fluctuating interest rates and an evolving macroeconomic landscape.
A key element of HSBC’s cost-cutting plan is a targeted 8% reduction in personnel expenses over the next two years. Elhedery has framed this initiative as part of a broader effort to ensure that HSBC’s financial and operational resources are aligned with its long-term strategic goals. The bank’s leadership remains committed to executing these changes while maintaining a focus on delivering sustainable growth and shareholder value.
HSBC’s Hong Kong-listed shares responded positively to the earnings announcement, climbing over 1% in afternoon trading. Meanwhile, the bank confirmed a $2 billion share buyback program and declared a total dividend payout of $0.87 per share for 2024, reflecting its strong capital position and confidence in its future prospects.
As HSBC moves forward with its restructuring efforts, Elhedery’s leadership will be closely scrutinized. His willingness to implement bold changes, including cutting back investment banking operations in Europe and the Americas, signals a decisive shift toward an Asia-centric growth strategy. With a clear emphasis on cost efficiency and regional expansion, HSBC’s transformation under Elhedery’s stewardship is poised to shape its trajectory in the years to come.
