HSBC annual pre-tax profit drops over 7%, revenue jumps as bank’s results top estimates

Europe’s largest lender HSBC on Wednesday reported annual pre-tax profit of $29.91 billion, beating analysts’ estimates on the back of a strong performance in its wealth division and Hong Kong businesses.

While annual profit declined 7.4%, HSBC’s revenue gained 4%, year on year, and both exceeded estimates.

Here are HSBC’s full-year results compared with the consensus estimates compiled by the bank.

• Pre-tax profit: $29.91 billion vs. $28.86 billion
• Revenue: $68.27 billion vs. $67.36 billion

The lender’s fourth-quarter profit before tax rose to $6.8 billion, up $4.5 billion from a year earlier, largely due to favorable one-off items linked to business disposals. Operating expenses rose 8% to $9.3 billion, reflecting restructuring costs, technology investment and higher performance-related pay.

Its revenue for the final quarter jumped 42% year on year to $16.4 billion.

HSBC Group CEO Georges Elhedery said in a statement that 2025 marked a year of “decisive action and swift execution,” with all four of the bank’s businesses performing well and building strong momentum.

The lender now aims to deliver a return on average tangible equity — a measure of profitability — of 17% or more, excluding notable items, in between 2026 and 2028. RoTE was 13.3% in 2025.

The results come close on the heels of HSBC completing the privatization of Hang Seng Bank on Jan. 26, with the latter’s shares subsequently delisted from the Hong Kong Stock Exchange.

HSBC said last year that the deal would be add to its earnings and was a better use of capital than buybacks.

“We do anticipate revenue and cost synergies between the two brands, but we expect that to come through gradually in the medium term,” Morningstar’s equity analyst Kathy Chan said.

The take private offer was “an exciting opportunity to grow both Hang Seng and HSBC,” Elhedery said last October, adding that the bank would preserve Hang Seng’s brand while investing to strengthen its capabilities.

Addressing questions on potential job cuts, Elhedery told CNBC’s Emily Tan that HSBC was targeting about 8% reduction in payroll costs, but stressed the bank had not not set specific headcount reduction targets.

He said the focus was on simplifying the group at scale and removing duplicate roles, pointing to a net 15% reduction in managing director positions through de-duplication.

At the start of the month, Bloomberg reported that HSBC was set to award minimal or no bonuses to some bankers as it moves toward a tougher, more performance-driven compensation model similar to that of its Wall Street peers. 

The bank intends to use the upcoming bonus round to push out underperformers in areas such as investment banking and wealth management, potentially including managing directors, the report said, citing according to people familiar with the matter.

While HSBC has not confirmed any final decisions regarding plans to cull underperformers, Morningstar’s Chan said she would not be surprised to see further headcount reductions, given the Group’s broader goal to improve operational efficiency and deliver cost savings.

Hong Kong listed shares of HSBC declined 0.46%.

—CNBC’s Emily Tan contributed to this report.