HSBC, the UK’s largest bank, has announced a pre-tax profit of $32.3 billion (£25.2 billion) for 2024, up from $30.3 billion (£24.1 billion) in 2023, according to its latest financial results. Alongside this growth, the bank has committed to reducing costs by $1.5 billion (£1.2 billion) by the end of 2026 as part of a strategic overhaul.
The cost-cutting measures come as HSBC undergoes a major restructuring under the leadership of Georges Elhedery, who took over as chief executive in 2024.
The bank aims to streamline its global operations, prioritise efficiency, and invest in areas where it holds a competitive edge. However, the restructuring will also involve $1.8 billion (£1.4 billion) in severance and upfront costs over the next two years.
HSBC reports profit growth amid restructuring
HSBC’s latest financial results highlight strong performance, with profit after tax reaching $25 billion (£19.8 billion) in 2024. Pre-tax profit for the fourth quarter alone was $2.3 billion (£1.8 billion), up by $1.3 billion (£1 billion) compared to the same period in 2023, according to the bank’s annual report.
Revenue remained steady at $65.9 billion (£52.2 billion) for the year, while operating expenses rose by $1 billion (£0.8 billion). HSBC attributed the increase in expenses to higher wage costs and spending on technology, reflecting its investment in digital banking services.
Chief executive Georges Elhedery described the performance as a solid foundation for future growth, stating: “Our strong 2024 performance provides firm financial foundations upon which to build for the future, as we prioritise delivering sustainable strategic growth and the best outcomes for our customers.”
Cost-cutting strategy and global restructuring
HSBC’s cost-cutting plan is aimed at making the bank “simpler, more agile, and focused”, according to Elhedery. The strategy includes redeploying $1.5 billion (£1.2 billion) from non-strategic areas to more profitable divisions while implementing measures to streamline operations.
To achieve its savings target, HSBC has outlined $0.3 billion (£0.24 billion) in cost reductions for 2025, with the remainder of the $1.5 billion (£1.2 billion) in savings expected by 2026. The restructuring will also result in job cuts, though the bank has not specified the number of roles affected.
Elhedery has introduced a “smaller, core team” of executives with a focus on managing costs and capital more efficiently. He stated: “We are embedding this approach across the organisation to ensure we are continually focused on these two important principles.”
