HSBC announced a share buyback of up to $3 billion on Tuesday, as its first-quarter earnings for 2025 surpassed market expectations, buoyed by strength in its wealth management and corporate banking businesses.
The London-based bank plans to complete the buyback before announcing its interim results later this year.
Europe’s largest lender reported a profit before tax of $9.5 billion, beating consensus estimates of $7.8 billion, despite marking a 25% decline from the same period last year. The decline was primarily attributed to one-time gains in the previous year linked to business disposals in Canada and Argentina. On a quarter-over-quarter basis, however, pre-tax profit rose sharply, climbing nearly 317%.
Revenue for the first quarter reached $17.65 billion, above the $16.67 billion expected by analysts. While net interest income fell to $8.3 billion from $8.7 billion a year earlier due to lower market rates, the bank’s wealth management and institutional banking segments delivered robust results.
“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,” said Group CEO Georges Elhedery.
The bank has continued to implement a sweeping restructuring plan introduced last year. This includes splitting its operations into “Eastern” and “Western” markets and targeting $300 million in cost savings for 2025, with an overall $1.5 billion in reductions by the end of 2026. However, HSBC noted that the reorganization would also incur upfront costs of $1.8 billion over the next two years.
As part of its broader strategy, HSBC has also increased its provisions for expected credit losses to $876 million in the first quarter, up by $202 million from the previous period. This includes $100 million specifically set aside for Hong Kong’s commercial property sector. The move reflects the bank’s cautious stance amid rising global economic uncertainty and ongoing geopolitical tensions.
In its earnings release, HSBC highlighted protectionist trade policies as a growing source of concern, citing their impact on consumer and business sentiment. The bank warned that these developments could lead to further volatility in economic forecasts and financial markets.
“Despite uncertainties on global trade, HSBC’s restructuring progress should continue to bring positive impacts on cost-saving,” said Manyi Lu, equity research analyst at DBS Bank.
She added that while the full effect of recently announced US tariffs has yet to be felt, their implications could become more significant in the quarters ahead.
The $3 billion buyback figure exceeded analyst expectations, with Morningstar’s Michael Makdad noting it was larger than the $2 billion many had anticipated. HSBC also declared an interim dividend of $0.10 per share and saw its stock rise 1.5% in Hong Kong following the announcement.
Reuters, the Financial Times, and CNBC contributed to this report.
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