What Happened
HSBC Holdings (LSE: HSBA) shares experienced a significant increase of over 5% in morning trading on February 25, 2025, reflecting a more than threefold rise over the past five years. This surge follows the bank’s announcement of robust full-year results, despite a slight decline in profit before tax, which fell by $2.4 billion to $29.9 billion due to one-off losses and restructuring costs totaling $4.9 billion.
Why It Matters
The bank reported a strong return on tangible equity (RoTE) of 17.2%, excluding one-off items, and anticipates maintaining a RoTE of at least 17% from 2026 to 2028, alongside ongoing annual revenue growth. Additionally, HSBC has accelerated its cost-cutting program, achieving its target six months ahead of schedule, which includes a 15% reduction in managing director roles while increasing bonuses for top performers by 10%.
What’s Next
As HSBC continues its internal overhaul under CEO Georges Elhedery, investors are keen to see how these changes will enhance the bank’s efficiency and competitiveness, particularly in the Asian market. The bank’s stock is currently priced at £12.914, with a year-to-date gain of 8.4% and a remarkable 51.4% return over the past year. The focus will now shift to how these strategic adjustments will impact HSBC’s performance moving forward.
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