HSBC increased its pre-tax profits by $2bn in its financial year 2024 as the company begins to operate as four separate businesses.
While revenue took a slight dip in 2024 to $65.9bn from $66.1bn the previous year, profit before tax rose to $32.3bn. Profits were aided by the sale of its Canadian banking business for a $4.8bn gain, but slightly injured by the disposal of its Argentinian business, which came at a $1bn loss.
HSBC announced the separation of its structure into four separate businesses last October, citing a need to “reduce the duplication and decision making”. As of 1 January, the branches now include UK, Hong Kong, Corporate and Institutional Banking, and International Wealth and Premier Banking.
Sir Mark Tucker, group chairman of HSBC, said: “Optimising cost and capital allocation, we completed the sale of our businesses in Canada, Russia, Argentina, and Armenia, as well as our retail banking operations in France and Mauritius. We announced the planned sale of our business in South Africa and of our private banking business in Germany, as well as the planned sale of our life insurance business in France.
“In parallel, our strategic investments are yielding significant results. In Wealth, for instance, revenue grew by 18% in 2024, including a 21% increase in fee and other income. The continued inflow of Net New Invested Assets and growth in total customers point to the material upside opportunity. In Hong Kong, for instance, we added approximately 800k new-to-bank customers.”
Share buybacks will also continue for the company, who announced further buybacks of $2bn in its company results, following announcements that totalled $9bn in 2024.
“Since the start of 2023, we have repurchased 11% of the issued share count. Combined with our sustained levels of profitability, this led to greater earnings and dividends per share for our shareholders,” Tucker said.
“Dividends paid in 2024, together with a more than 20% increase in the share price, delivered a total shareholder return for the year of more than 30%. Our performance demonstrates that our strategy is working. To maintain, and indeed accelerate, the momentum, we are being very deliberate in creating investment capacity for priority areas, focusing on long-term strategic growth.”
This article first appeared in our sister publication, Portfolio Adviser.
