HSBC Annual Profit Jumps 6.5%, Marginally Misses Estimates

HSBC Holdings plc, the UK's largest bank and one of the world's leading financial institutions, reported a 6.5% increase in annual profit for the year ended 31 December 2024, reaching $32.3 billion. While this figure represents a significant improvement over the previous year's $30.3 billion, it fell slightly short of analysts' estimates. The bank's revenue also grew by 30% compared to the previous year, driven by the strength of its balance sheet in a higher interest-rate environment.



HSBC's profit growth was primarily driven by revenue growth, which was driven by the strength of its balance sheet in a higher interest-rate environment. The bank also approved a fourth interim dividend of $0.36 per share, contributing to its highest full-year dividend since 2008. Additionally, HSBC announced share buybacks totalling $7 billion in 2023 and an additional $2 billion in 2024, which contributed to shareholder returns.

However, HSBC's profit for the third quarter of 2024 missed analysts' estimates. The primary reasons for this shortfall can be attributed to lower-than-expected revenue growth, increased operating expenses, and higher expected credit losses (ECL) charges. To address these challenges, HSBC could focus on driving growth in its Wealth and Wholesale Transaction Banking segments, review and optimize its cost structure, and enhance its credit risk management processes.



In conclusion, HSBC's annual profit increase of 6.5% reflects the bank's strong performance and strategic objectives. However, the bank's profit for the third quarter of 2024 missed analysts' estimates due to lower-than-expected revenue growth, increased operating expenses, and higher ECL charges. To address these challenges, HSBC could focus on driving growth in its Wealth and Wholesale Transaction Banking segments, review and optimize its cost structure, and enhance its credit risk management processes. Despite the shortfall, HSBC remains a significant player in the global banking sector, with a strong market position and a commitment to distributing capital to shareholders.