HSBC unveils cost cuts in drive to create a 'simple, more agile, focused bank'

Core Insights - HSBC announced cost-cutting plans aiming to save $300 million in 2025 and reduce its cost base by$1.5 billion by the end of 2026, with upfront costs of $1.8 billion over the next two years [1][7]. Financial Performance - HSBC reported annual pre-tax profits of$32.3 billion, an increase of $2 billion from 2023, but below LSEG analysts' estimates of$32.63 billion. Revenues were $65.85 billion, slightly below forecasts of$66.52 billion [3]. Stock Performance - HSBC's stock reached a 20-year high, increasing 40% over the past 12 months and 14% this year, although it dipped 0.8% to £8.91 on Wednesday, valuing the bank at approximately £160 billion ($201 billion) [2]. Strategic Changes - The new CEO, Georges Elhedery, is restructuring the bank by simplifying its structure into "eastern markets" (Asia-Pacific and Middle East) and "western markets" (UK, Europe, and Americas), and reducing the investment banker headcount [4]. Shareholder Returns - HSBC plans to initiate a share buyback program worth up to$2 billion as part of its strategy to enhance shareholder value [5]. Analyst Perspectives - Analysts express cautious optimism regarding HSBC's cost-cutting measures, noting that while the plans are positive, they do not present significant new initiatives. The focus on efficiency is seen as a series of small, coordinated steps [2][6].