Hsbc on track to deliver $1.5bn cost savings six months early as profit slips
hsbc reported an annual pre-tax profit decline and a large staff bonus pool as its chief executive said the bank’s overhaul was nearing completion. The combination of restructuring gains, one-off charges and strategic moves matters now because management is promising faster savings and higher returns while absorbing significant write-downs and legal costs.
Hsbc on track for $1. 5bn savings six months early
The lender said it remains on course to hit a $1. 5bn cost-saving target and that those savings are expected six months earlier than planned. Management’s reorganisation—including a move to east–west operating divisions, the shedding of smaller investment banking units in the US and Europe, and cuts among senior managers—was cited as the driver of accelerated savings and helped push the London-listed stock sharply higher.
Georges Elhedery signals overhaul is almost over
Georges Elhedery, who became chief executive in 2024, said the overhaul was drawing to a close and described the bank as becoming "a simple, more agile, focused bank built for a fast-changing world. " Elhedery received £6. 6m in 2025, up 18% from a year earlier, reflecting the board’s assessment of his execution of the turnaround.
Bonus pot, dividends and pay decisions
Bankers at the group will share a $3. 9bn bonus pot, the highest in more than a decade and 10% larger than the prior year, a figure determined after a review of performance against financial and non-financial metrics. The board approved a final dividend of 45 cents a share to add to a 30-cent payout earlier in the year. That combined distribution remains below the 87 cents paid in total for 2024.
Profit, one-off charges and the Bank of Communications writedown
Pre-tax profit slipped 7% to $29. 9bn in 2025, a fall that followed an unusually strong 2024 but nevertheless came in about $1bn above market forecasts. The headline was affected by $4. 9bn of one-off charges last year, including a $2. 1bn write-off tied to holdings in China’s Bank of Communications; that writedown was in part attributed to the long downturn in China’s property sector. The combination of those charges and other provisions drove the mainland China business’s pre-tax profit down 66% to $1. 1bn.
Restructuring, provisions and capital targets
The bank logged $1. 4bn of legal provisions and $1bn of restructuring and related costs within the $4. 9bn of special items. HSBC is lifting its target for return on tangible equity to "17% or better" through 2028, up from a prior aim in the mid-teens for the three years through 2027; actual return on tangible equity last year was 13. 3%.
Hang Seng takeover, synergy goals and balance-sheet moves
Last year the group took its Hang Seng Bank subsidiary private in a $13. 7bn deal. Combined banking operations are targeting $900m in pre-tax revenue and cost synergies by the end of 2028, while management has flagged $600m of restructuring costs tied to integration. Market reaction to the results pushed the London-listed shares up 5% in morning trading on Wednesday; the stock had risen about 50% over 2025 and climbed a further 10% year to date, lifting the bank’s market value to roughly $300bn.
Investor scrutiny and governance changes
Analysts at Jefferies warned investors may welcome the strong topline performance but could question management’s forecast of just a 1% rise in costs for 2026 given a competitive environment and the need to invest in AI technology. In December the board appointed former KPMG partner Brendan Nelson as chair after a prolonged search left the bank without a permanent executive in the top role for months.
What makes this notable is the coexistence of large, immediate costs and a clear plan for faster, measurable savings: management is using restructuring and strategic disposals to lift medium-term profitability targets, even as near-term results reflect the charge of those moves and regional headwinds.
