HSBC CEO Signals Overhaul Nearing Completion Amid Profit Decline
The chief executive of HSBC has indicated that the extensive restructuring of Europe’s largest bank is approaching its final stages, despite a decline in annual profits.
Georges Elhedery, who assumed the role of HSBC’s chief executive in 2024, stated that the bank is
“becoming a simple, more agile, focused bank built for a fast-changing world”.
HSBC faced $4.9bn (£3.6bn) in one-off charges, resulting in a 7% decrease in pre-tax profit to $29.9bn last year. However, this figure exceeded City analysts’ forecasts by approximately $1bn and followed an unusually strong performance in 2024.
The bank announced it is raising its target for return on tangible equity—a key profitability metric for banks—to
“17% or better” through 2028, up from the previous
“mid-teens” target set for the three years through 2027. The return on tangible equity for last year stood at 13.3%.
Following the results announcement, HSBC’s shares listed in Hong Kong rose by 2.5%.
Impact of One-Off Charges and Business Performance
Among the charges recorded last year was a $2.1bn write-off related to HSBC’s holdings in China’s Bank of Communications, which was adversely affected partly due to the prolonged downturn in China’s property market.
This contributed to a 66% drop in pre-tax profit for HSBC’s mainland China operations, which fell to $1.1bn.
The bank also recorded legal provisions amounting to $1.4bn, alongside $1bn in restructuring and related costs.
Strategic Changes Under Elhedery’s Leadership
Since taking over as CEO 18 months ago, Georges Elhedery, a long-serving HSBC executive, has implemented significant changes. These include reorganizing the bank’s operating divisions along east-west lines, divesting smaller investment banking units in the US and Europe, and reducing the number of senior management positions.
In 2025, HSBC initiated 11 business exits across various global markets.
These strategic efforts have contributed to a 50% increase in the bank’s London-listed shares during 2025, with an additional 10% rise so far in the current year, bringing HSBC’s market capitalization to approximately $300bn.
Recent Acquisitions and Financial Outlook
Last year, HSBC completed a $13.7bn acquisition. On Wednesday, the bank stated that the combined banking operations from this deal aim to achieve $900m in pre-tax revenue and cost synergies by the end of 2028, although restructuring costs of around $600m are expected.
HSBC also announced a final dividend payment of 45 cents per share, supplementing the 30 cents paid earlier in the year. This total dividend remains below the 87 cents per share distributed in 2024.
Elhedery’s total remuneration for 2025 was £6.6m, representing an 18% increase compared to the previous year.
Analyst Perspectives and Leadership Changes
Jefferies analysts commented that while investors are likely to welcome HSBC’s strong results, there may be concerns regarding the bank’s forecast of only a 1% increase in costs for 2026, given the competitive landscape and the necessity to invest in artificial intelligence technology.
In December, HSBC appointed a new chair following an extended search process that left the bank without a permanent executive in the top role for several months.
