HSBC Holdings PLC (LON:HSBA) reported a 6.6% rise in annual profit, fueled by gains from its wealth management and trading divisions. This comes despite a decline in net interest income (NII). The bank also unveiled a new $2 billion share buyback, demonstrating its commitment to returning value to shareholders.

Key Financial Highlights

• Profit before tax: $32.3 billion in 2024, marking a 6.6% increase from $30.3 billion in 2023.
• Profit excluding notable items: Increased by $1.4 billion to $34.1 billion.
• Net interest income (NII): Fell $3.1 billion to $32.7 billion, due to rising deposit costs and asset sales.
• 2025 NII forecast: HSBC anticipates $42 billion in NII, though margin pressure continues.
• Dividends: Announced a fourth interim dividend of $0.36 per share, totaling $0.87 per share for 2024, including an extra from the sale of its Canada business.

HSBC’s Strategic Direction

CEO Georges Elhedery is implementing cost restructuring, aiming to cut $1.5 billion in annual expenses by 2026. In 2024, the bank’s share buybacks totaled $9 billion, resulting in an 11% reduction in its share count since early 2023.

Market Reaction & Outlook

• HSBC’s Hong Kong-listed shares dipped 0.3% after earnings announcements.
• Investors remain wary as margin pressures and cost reductions shape HSBC’s trajectory.

Relevant Financial APIs for Analysis

• Balance Sheet Statements API – Monitor HSBC’s financial health and allocation strategies.
• Company Rating API – Review HSBC’s investment prospects following earnings.

Conclusion

HSBC’s solid profit growth, aggressive cost management, and focus on shareholder returns reflect its financial strength. However, declining NII remains a concern for investors. The bank’s performance in 2025 will depend on stabilizing margins and executing strategic cost reductions.