Latest news with #London-headquartered
Yahoo
4 hours ago
- Business
- Yahoo
HSBC banks lower profits on higher costs
Bank giant HSBC said Wednesday that group profits fell in the first half on higher costs but noted that it was "well positioned" to deal with the effects of US tariffs. Profit after tax dropped by one third to $12.4 billion compared with the first six months of 2024, hit by restructuring costs and an impairment on its stake in a Chinese lender. The London-headquartered bank is months into a shakeup aimed at simplifying the group's structure and delivering $1.5 billion in annual cost savings in 2027. It comes as the bank sector faces volatile trading as a result of US President Donald Trump's tariffs onslaught. "We have delivered these results in an ongoing period of uncertainty," chief executive Georges Elhedery said in call with reporters Wednesday. "It has become increasingly important to simplify the organisation and make it more agile," he added. The bank recorded a $2.1 billion impairment linked to its stake in China's Bank of Communications, which was recapitalised by the country's finance ministry this year. HSBC last year reported a $3 billion charge on the value of its stake in the Chinese lender, which was hit by property loan writeoffs. Elhedery said that HSBC is "making positive progress" in its structural overhaul, which began in October, shortly after he became chief executive. Operating expenses increased four percent, which the bank partly attributed to restructuring and related costs. The bank generates most of its revenue in Asia and has spent several years pivoting to the region, vowing to develop its wealth business and target fast-growing markets. HSBC shares fell around 2.5 percent in morning deals on London's top-tier FTSE 100 index despite a dividend payment and plans to repurchase up to $3 billion of shares. - Missed expectations - Elhedery said HSBC is "well positioned to manage the changes and uncertainties prevalent within the global environment in which we operate, including in relation to tariffs". He noted that a "broader macroeconomic deterioration" could impact returns in future years. Profit before tax fell more than 26 percent to $15.8 billion, falling short of analyst expectations. First-half revenue declined nine percent to $34.1 billion. "Repositioning HSBC is not a simple task given its size and scale," said Russ Mould, investment director at AJ Bell. "There are also challenges in its priority regions such as property market weakness in Hong Kong and mainland China. "It means investors must continue to brace themselves for setbacks in its results well into 2026," he added. In Hong Kong, HSBC shares in were down 3.8 percent at the close. Morningstar senior equity analyst Michael Makdad said the bank "needs to make sure that shareholders in Asia remain on board with the strategic direction... centred on simplification and intensive cost-cutting, but without a radical overhaul of the entire business model". Makdad added that its immediate challenge is to find a replacement for board chairman Mark Tucker, who will retire by the end of 2025 after eight years helping to steer Europe's largest bank. hol-ajb/bcp/rl Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Int'l Business Times
6 hours ago
- Business
- Int'l Business Times
HSBC Banks Lower Profits On Higher Costs
Bank giant HSBC said Wednesday that group profits fell in the first half on higher costs but noted that it was "well positioned" to deal with the effects of US tariffs. Profit after tax dropped by one third to $12.4 billion compared with the first six months of 2024, hit by restructuring costs and an impairment on its stake in a Chinese lender. The London-headquartered bank is months into a shakeup aimed at simplifying the group's structure and delivering $1.5 billion in annual cost savings in 2027. It comes as the bank sector faces volatile trading as a result of US President Donald Trump's tariffs onslaught. "We have delivered these results in an ongoing period of uncertainty," chief executive Georges Elhedery said in call with reporters Wednesday. "It has become increasingly important to simplify the organisation and make it more agile for further growth," he added. The bank recorded a $2.1 billion impairment linked to its stake in China's Bank of Communications, which was recapitalised by the country's finance ministry this year. Elhedery said that HSBC is "making positive progress" in its structural overhaul, which began in October, shortly after he became chief executive. Operating expenses increased four percent, which the bank partly attributed to restructuring and related costs. The bank generates most of its revenue in Asia and has spent several years pivoting to the region, vowing to develop its wealth business and target fast-growing markets. HSBC shares fell around 2.5 percent in morning deals on London's top-tier FTSE 100 index despite a dividend payment and plans to repurchase up to $3 billion of shares. Elhedery said HSBC is "well positioned to manage the changes and uncertainties prevalent within the global environment in which we operate, including in relation to tariffs". He noted that a "broader macroeconomic deterioration" could impact returns in future years. Profit before tax fell more than 26 percent to $15.8 billion, falling short of analyst expectations. First-half revenue declined nine percent to $34.1 billion. "Repositioning HSBC is not a simple task given its size and scale," said Russ Mould, investment director at AJ Bell. "There are also challenges in its priority regions such as property market weakness in Hong Kong and mainland China. "It means investors must continue to brace themselves for setbacks in its results well into 2026," he added. In Hong Kong, HSBC shares in were down 3.8 percent at the close. Morningstar senior equity analyst Michael Makdad said the bank "needs to make sure that shareholders in Asia remain on board with the strategic direction... centred on simplification and intensive cost-cutting, but without a radical overhaul of the entire business model". Makdad added that its immediate challenge is to find a replacement for board chairman Mark Tucker, who will retire by the end of 2025 after eight years helping to steer Europe's largest bank.
Bloomberg
12 hours ago
- Business
- Bloomberg
HSBC Profit Squeezed by Costs, Higher Impairment Charges
HSBC Holdings Plc's earnings for the second quarter fell short of expectations after it posted a rise in expenses and took a charge on its holdings in a Chinese bank. The London-headquartered bank recorded a $2.1 billion impairment linked to its holding in Bank of Communications Co. At the same time, the firm said expenses jumped 10% to $8.9 billion.
Business Times
5 days ago
- Business
- Business Times
HSBC cuts equities team in Germany as CEO Georges Elhedery continues revamp
[LONDON] HSBC Holdings is planning to let go of several staff in its Germany-based equities team as it continues to pare the investment banking division outside Asia and the Middle East. The London-headquartered lender is preparing to cut equities sales and trading jobs in the Dusseldorf office, according to sources familiar with the matter. The move is part of chief executive officer Georges Elhedery's effort to revamp the investment bank, the sources said, asking not to be identified discussing private information. Europe's largest financial institution has already culled dozens of analysts in its investment bank in the last couple of months and it has shut down its US, UK and European equity capital markets and M&A units. 'Equities sales and trading supports the growth of our Prime and Wealth businesses, facilitates equities distribution to the market and supports our global clients investing in equities in both developed markets and emerging markets,' an HSBC spokesperson said in response to questions about the cuts at the German unit. Since taking over as CEO last September, Elhedery has instituted a widespread overhaul of the bank that has involved creating four new divisions under what he has called his 'simplification' plan. He has also combined HSBC's commercial and investment banking units, while making operations in the UK and Hong Kong standalone businesses. BLOOMBERG
Business Times
5 days ago
- Business
- Business Times
HSBC cuts equities team in Germany as CEO Elhedery continues revamp
[LONDON] HSBC Holdings is planning to let go of several staff in its Germany-based equities team as it continues to pare the investment banking division outside Asia and the Middle East. The London-headquartered lender is preparing to cut equities sales and trading jobs in the Dusseldorf office, according to sources familiar with the matter. The move is part of chief executive officer Georges Elhedery's effort to revamp the investment bank, the sources said, asking not to be identified discussing private information. Europe's largest financial institution has already culled dozens of analysts in its investment bank in the last couple of months and it has shut down its US, UK and European equity capital markets and M&A units. 'Equities sales and trading supports the growth of our Prime and Wealth businesses, facilitates equities distribution to the market and supports our global clients investing in equities in both developed markets and emerging markets,' an HSBC spokesperson said in response to questions about the cuts at the German unit. Since taking over as CEO last September, Elhedery has instituted a widespread overhaul of the bank that has involved creating four new divisions under what he has called his 'simplification' plan. He has also combined HSBC's commercial and investment banking units, while making operations in the UK and Hong Kong standalone businesses. BLOOMBERG
