HSBC Holdings plc has announced its 2024 annual results, reporting a US$32.3 billion profit before tax, a US$2 billion increase from 2023.
However, the bank has also outlined cost-cutting measures, including restructuring and severance costs aimed at reducing expenses by US$1.5 billion annually by 2026.
As part of these efforts, HSBC’s global workforce stood at 220,928 at the end of 2024, a 3% decline from 227,552 at the end of 2023, according to its financial report.
These cuts are part of a broader restructuring with the bank laying off 40 investment bankers in Hong Kong on Monday.
HSBC had also announced in October that it would merge parts of its commercial and investment banking operations and implement a new leadership structure as part of its broader realignment strategy.
Despite these reductions, HSBC’s bonus cash pool remained stable at US$3.80 billion, slightly up from US$3.77 billion in 2023, Reuters reported.
The bank’s salary and benefits bill rose to US$20.15 billion, up from US$19.62 billion a year earlier.
CEO Georges Elhedery received US$6.8 million in total compensation for 2024, benefiting from an annual incentive following Britain’s removal of the cap on banker bonuses.
His potential earnings for 2025 could rise to US$19.2 million, with more than half tied to performance-based incentives.
HSBC’s profit growth was largely driven by its wealth management and markets businesses, while business disposals had both positive and negative effects on overall earnings.
The bank remains focused on cutting costs, expecting to incur US$1.8 billion in severance and restructuring costs over 2025 and 2026, classified as notable items.
Looking ahead, HSBC is targeting a mid-teens return on tangible equity from 2025 to 2027 and expects banking net interest income to reach around US$42 billion in 2025, though this estimate is based on market conditions and may be adjusted in future reports.
The bank continues to emphasize digital transformation, embedded finance, and its expanding presence in Asia, where customer deposit growth remains strong.
Additionally, HSBC confirmed plans for a US$2 billion share buyback, expected to be completed by the first quarter of 2025, and declared a fourth interim dividend of US$0.36 per share, bringing the total for 2024 to US$0.87 per share, including a US$0.21 special dividend.
HSBC, like other major banks including Barclays, Goldman Sachs, and JPMorgan, has adjusted its approach to compensation amid broader cost-cutting measures.
Britain’s removal of EU-era bonus restrictions has allowed for more flexibility in pay structures, though HSBC’s cost focus extends beyond executive compensation.
Featured image credit: Edited from Freepik
