HSBC reported a stronger-than-expected annual profit for 2024, driven by robust growth in its wealth and markets businesses. The bank also announced a $2 billion share buyback and outlined aggressive cost-cutting targets as new CEO Georges Elhedery reshapes the Asia-focused lender.

1. HSBC's 2024 Profit Surpasses Estimates

📈 Key Financial Highlights:

• Pre-tax profit: $32.3 billion (vs. $31.7B analyst forecast, $30.3B in 2023)
• Revenue growth: Boosted by wealth management & market trading performance
• Cost targets: $300M in reductions in 2025, with an annualized $1.5B reduction by 2026

Despite falling interest rates, HSBC's core income remained strong, showcasing resilience in a volatile global economy.

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2. HSBC's New Strategy Under CEO Georges Elhedery

Since taking over in September 2024, Elhedery has focused on:
✅ Optimizing geographic & business resource allocation
✅ Strengthening HSBC's Asian market presence
✅ Enhancing cost & capital efficiency

💡 Quote from Elhedery:
"We have renewed vigour in finding efficiencies… This will enhance how we actively manage costs and capital and target investments."

HSBC's Asia-first strategy aligns with its profit concentration in the region, while cost-cutting measures will streamline operations amid global economic uncertainty.

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3. $2 Billion Share Buyback & Market Outlook

💰 Shareholder Returns:

• HSBC announced a new $2B share buyback, expected to be completed before next earnings.
• The bank aims to maintain strong capital returns, balancing restructuring costs.

🔍 Global Market Challenges:

• Diverging central bank policies:
  • Eurozone has room for rate cuts
  • U.S. Federal Reserve holding steady
  • Bank of Japan expected to raise rates
• HSBC's growth strategy must navigate global monetary policy shifts.

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Final Thoughts

HSBC's better-than-expected earnings, cost-cut plan, and $2B buyback reinforce its Asia-first growth strategy. However, global economic shifts & monetary policy divergence could present challenges in 2025.

🔹 Investor Takeaway: HSBC remains a strong performer, but watch for how it executes cost cuts and navigates global headwinds