HSBC: Q4 better than expected, but share down

(CercleFinance.com) - On Thursday, HSBC reported a stronger-than-expected rise in Q4 taxable profit, despite a drop in revenues, due to its recent asset disposals.


Europe's leading bank in terms of assets this morning reported pre-tax profits of $2.3bn for Q4, compared with $977m a year earlier.

The consensus was expecting a profit of around $1.6bn.

However, net banking income fell by 11% to $11.6bn, due to the company's exit from the Argentine market and losses on the sale of its retail banking activities in France.

Georges Elhedery, the new CEO, reaffirmed on Thursday his intention to continue simplifying the company's business model by creating a "more agile" organization focused on its core businesses.

With regard to its targets, HSBC said it was aiming for a return on tangible equity (RoTE) of around 15% over the three financial years 2025, 2026 and 2027, excluding exceptional items.

The bank also plans to reduce its costs by some $300m this year, with savings expected to reach a cumulative montaznt of $1.5bn by end-2026.

This better-than-expected publication was not enough to completely convince investors, as illustrated by the 1.2% fall in the share price on the London Stock Exchange this morning, in a FTSE 100 index down 0.3%.

HSBC's business will face a number of headwinds in 2025 and 2026, namely lower interest rates, asset disposals and currency effects', warned analysts at RBC in a reaction note this morning.


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