Europe’s largest bank, HSBC Holdings Plc, has announced a fresh share repurchase programme of up to $3 billion (€2.6 billion) for the first half of 2025 as it reported its first-quarter earnings results on Tuesday. HSBC shares rose by 2.28% as of 09:30 CEST in London.
However, the UK-based lender reported a pre-tax profit of $9.5 billion (€8.4 billion) for the first quarter, down 25% from a year earlier, despite beating the company-compiled estimate of $7.8 billion (€6.9 billion). The bank noted that the profit was driven by a strong performance in the Wealth business within its International Wealth and Premier Banking (IWPB) division, its Hong Kong operations, and the foreign exchange division.
The Board has also approved an interim dividend of $0.10 (€0.09) per share.
Chief Executive Officer Georges Elhedery stated in the earnings announcement: “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. We continue to support our customers through this period of economic uncertainty and market unpredictability, which we enter from a position of financial strength.”
Elhedery, who assumed the role in September last year, has been driving cost-cutting efforts. Last year, the bank announced plans to merge two of its three major divisions—commercial banking and investment banking (the global banking and markets division). The restructuring involves dividing operations between an “Eastern Markets” branch, combining Asia-Pacific and the Middle East, and a “Western Markets” branch, comprising the non-ring-fenced UK bank, European markets, and North America. HSBC expects the reorganisation to deliver cost savings of $300 million (€264 million) this year. However, severance and other up-front costs are forecast to reach $1.8 billion (€1.6 billion) over 2025 and 2026.
Economic uncertainties weigh on growth
HSBC’s largest market is Asia, making the bank particularly vulnerable to tensions arising from the US-China trade war. Its share price plunged as much as 20% after President Trump announced reciprocal tariffs on 3 April, before rebounding 17% amid the recent broad market rally following the White House’s shift in tariff stance. Year-to-date, the stock is up 7.3% as of market close in Europe on Monday.
In its outlook, the bank stated: “The macroeconomic environment is facing heightened uncertainty, in particular from protectionist trade policies, creating volatility in both economic forecasts and financial markets and adversely impacting consumer and business sentiment.”
In the first three months of the year, HSBC reported revenue of $17.6 billion (€15.5 billion), down 26% from a year earlier. The annualised return on average tangible equity (RoTE) was 17.9%, compared with 26.1% in the first quarter of 2024.
The bank expects demand for lending to remain muted in 2025 amid continued uncertainty and market turmoil. It anticipates a low single-digit percentage direct impact on the group’s revenue and approximately $0.5 billion (€0.44 billion) in incremental expected credit losses. “We have assessed plausible downside scenarios that model significantly higher tariffs, and related impacts on growth, policy rates, and inflation on our earnings,” the bank noted.
Nonetheless, HSBC maintains a positive longer-term outlook, forecasting mid-single-digit percentage growth over the medium to long term and continuing to expect double-digit percentage average annual growth in fees and other income in its Wealth business.
