Branch of HSBC bank on 15th January 2024 in London, United Kingdom. HSBC Bank plc is a British multinational banking and financial services organisation. HSBCs international network comprises around 7,500 offices in over 80 countries globally. (photo by Mike Kemp/In Pictures via Getty Images)
Mike Kemp | In Pictures | Getty Images
Europe’s largest lender HSBC’s first-quarter results on Tuesday beat estimates on the back of robust performance of its wealth business as well as strength in its corporate and institutional banking segment.
The bank also announced share buyback of up to $3 billion which it intends to complete before its 2025 interim results are announced.
Here are HSBC’s first-quarter 2025 results compared with consensus estimates compiled by the bank.
- Profit before tax: $9.48 billion vs. $7.83 billion
- Revenue: $17.65 billion vs. $16.67 billion
The bank’s profit before tax declined 25% on a year-on-year basis, while Revenue fell 15% from last year. Pre-tax profit, however, soared nearly 317% from the previous quarter.
“Our strong results this quarter demonstrate momentum in our earnings, discipline in the execution of our strategy and confidence in our ability to deliver our targets,” HSBC Group CEO Georges Elhedery said.
The bank, however, warned of heightened uncertainty in the macroeconomic climate, highlighting that protectionist trade policies were adversely affecting consumer and business sentiment.
“Despite uncertainties on global trade, HSBC’s restructuring progress should continue to bring positive impacts on cost-saving,” said Manyi Lu, DBS Bank’s equity research analyst.
There might be some headwinds from tariff and concerns on global recession, but the effect will be more prominent in the following quarters, Lu told CNBC.
The earnings do not reflect the full impact of U.S. President Donald Trump’s tariffs, with “reciprocal” levies announced in April having been suspended. However, tariffs on steel, aluminum and autos have been in place since March.
Investors should watch whether the bank will lower its guidance going forward due to the tariff uncertainties, Lu added. “How large will the impact be depends on how the tariff on ASEAN countries will go after the 90-day grace period,” she said.
The additional $3 billion buyback was larger than the $2 billion figure that Morningstar was expecting, said Morningstar’s senior equity analyst Michael Makdad. The bank’s results were also better than he expected.
HSBC CEO Georges Elhedery was among four United Kingdom bank CEOs who recently urged the Chancellor of the Exchequer to scrap the country’s ring-fencing rules, Sky News reported. The move was reportedly aimed at boosting the UK economy.
Ring-fencing involves isolating a bank’s consumer banking business from its riskier investment banking activities.
Last October, HSBC announced a restructuring plan to split its operations into four divisions, creating separate “Eastern markets” and “Western markets” sectors. HSBC had said the reorganization will bring about $300 million in cost reductions this year.
However, it expects severance and other up-front costs of $1.8 billion over 2025 and 2026.
