HSBC (HSBA) Q4 2024 earnings summary

Executive summary

• Record 2024 profit before tax of $32.3bn, or $34.1bn excluding notable items, with a 14.6% return on tangible equity (16% ex-notables), driven by strategic disposals and strong Wealth and Personal Banking and Global Banking and Markets performance.

• $26.9bn distributed to shareholders in 2024, including $0.87 per share in dividends ($0.66 ordinary, $0.21 special) and $11bn in share buybacks.

• Major organizational simplification and reorganization into four core segments, empowering home markets, combining wholesale businesses, and reducing management layers for greater agility, with new CEO and CFO appointed.

• Targeting mid-teens return on tangible equity for 2025-2027, supported by cost discipline, strategic investments, and $1.5bn in annualized cost savings by end of 2026.

Financial highlights

• FY24 revenue was $65.9bn, up 1% YoY; revenue excluding notable items was $67.4bn, up 5%.

• Banking NII rose 3% YoY to $43.7bn; Wealth revenue up 21% YoY to $7.2bn.

• Q4 2024 profit before tax was $2.3bn, or $7.3bn excluding notable items; profit before tax up 10% year-over-year ex-notables.

• CET1 ratio at 14.9% at year-end, within the 14-14.5% target range.

• FY24 ECL charge was $3.4bn (36bps of gross loans); stage 3 balances at 2.4% of loans.

Outlook and guidance

• Targeting mid-teens ROTE each year from 2025 to 2027, excluding notable items.

• FY25 Banking NII expected around $42bn, with cost growth targeted at approximately 3%.

• ECL charges as a percentage of average gross loans expected to remain within 30–40bps in 2025.

• Medium-term guidance for double-digit CAGR in fee and other income, especially in wealth.

• CET1 capital ratio to be managed within 14–14.5% range, with a 50% dividend payout ratio target for 2025.