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HSBC Holdings saw a 7% drop in pretax profit to $29.9 billion after $4.9 billion in charges, but raised its return target and surged in stock value under Georges Elhedery.
By Reuters February 25, 2026, 11:31:39 AM IST (Published)
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HSBC Holdings reported a 7% drop in full-year pretax profit on Wednesday (February 25), hurt by $4.9 billion of one-off charges, but it lifted a key earnings target now that most of a planned business overhaul has been completed.
Chief Executive Georges Elhedery said in a statement that the bank had acted decisively last year.
Europe's largest bank posted a pretax profit of $29.9 billion last year, slightly ahead of the $28.9 billion average of broker estimates compiled by HSBC. The results come after an unusually strong 2024.
A raft of one-off charges
The charges included a $2.1 billion write-off related to its holdings in China's Bank of Communications (601328.SS), opens new tab which had been hurt by dilution and the long downturn in China's property sector. There were also legal provisions worth $1.4 billion as well as $1 billion of restructuring and related costs.
HSBC said it was raising its target for return on tangible equity, a key profit metric for banks, to "17% or better" through 2028, up from its "mid-teens" target set for the three years through 2027.
Hong Kong-listed shares of HSBC climbed around 3% after the results.
Elhedery, a career HSBC veteran, has shaken up the bank since assuming the chief executive role one and a half years ago by reorganising operating divisions along East-West lines, shedding sub-scale investment banking units in the U.S. and Europe, and slashing the ranks of senior managers.
All in all, the bank initiated 11 exits from various businesses across the globe last year.
Those efforts helped the bank's London-listed stock surge 50% in 2025 and it has climbed another 10% for the year to date to give the bank a market value of some $300 billion.
Hand Seng synergies and costs
HSBC took subsidiary Hang Seng Bank private in a $13.7 billion deal last year. It said on Wednesday (February 25) that their combined banking operations would target $900 million in pre-tax revenue and cost synergies by the end of 2028, but there would also be some $600 million restructuring costs.
The London-headquartered, Asia-focused bank has paused its share buyback programme for three quarters following the Hang Seng deal to shore up capital.
The bank said it would pay a final dividend of 45 cents a share, adding to 30 cents granted earlier in the year. That was, however, below the 87 cents paid in total for 2024.
Elhedery received £6.6 million in total remuneration in 2025, up 18% from a year earlier.
