HSBC has reported a decline in annual pre-tax profits for 2025, with earnings falling to 29.9 billion dollars (£22.1 billion), down 2.4 billion dollars (£1.8 billion) from the previous year. The global banking giant attributed the HSBC profit decline primarily to substantial one-off charges including legal provisions, costs related to organizational restructuring, and the sale of its French loan portfolio.
According to the bank’s annual results released recently, profits after tax also decreased by 1.9 billion dollars (£1.4 billion) to 23.1 billion dollars (£17.1 billion) for the full year. However, the final quarter of 2025 showed more positive momentum, with pre-tax profits rising by 4.5 billion dollars (£3.3 billion) to 6.8 billion dollars (£5 billion) compared to the same period in 2024.
Factors Behind HSBC Profit Decline
The lender explained that approximately 4.9 billion dollars (£3.6 billion) in adverse impacts weighed heavily on its annual performance. These charges encompassed legal provisions, expenses associated with simplifying the bank’s organizational structure, and losses from divesting its French-retained loan portfolio.
Additionally, the one-off costs reflect HSBC’s ongoing transformation efforts as the institution works to streamline operations and refocus its business strategy. The restructuring charges demonstrate the bank’s commitment to becoming more efficient despite the near-term financial impact on profitability.
Management Outlook and Revenue Growth Targets
Despite the HSBC profit decline in 2025, Group Chief Executive George Elhedery maintained an optimistic tone about the bank’s performance and future prospects. According to Elhedery, the business delivered a “strong performance” and sustained “strong momentum across the bank” throughout the year.
Meanwhile, the banking executive announced an upgraded revenue growth target, raising the year-on-year growth objective to 5% for 2028. This ambitious target signals management’s confidence in the bank’s strategic direction and operational improvements.
Elhedery emphasized the bank’s transformation journey, stating that HSBC is “becoming a simple, more agile, focused bank, one that moves with the speed our customers need to navigate the modern world.” He further noted that the institution is “delivering growth, investing for growth and executing our strategy with discipline and precision.”
Strategic Transformation Continues
The banking earnings report highlights HSBC’s ongoing efforts to balance short-term restructuring costs with long-term strategic positioning. The organizational simplification initiatives, while costly in the immediate term, are designed to enhance operational efficiency and customer responsiveness.
In contrast to the full-year results, the strong fourth-quarter performance suggests that HSBC’s transformation efforts may be beginning to yield positive results. The quarterly improvement in bank financial performance demonstrates potential momentum heading into 2026.
Furthermore, Elhedery expressed confidence in the bank’s ability to deliver value to shareholders despite the challenging year. His comments indicate that management views the 2025 profit reduction as a necessary investment in the bank’s future competitiveness rather than a sign of underlying business weakness.
The financial services giant’s commitment to its restructuring program reflects broader industry trends as global banks adapt to changing regulatory environments, technological disruption, and evolving customer expectations. The sale of non-core assets like the French loan portfolio aligns with HSBC’s strategy to concentrate resources on higher-performing markets and business segments.
HSBC will continue implementing its organizational simplification strategy throughout the coming quarters, with investors closely monitoring whether the bank can achieve its ambitious 5% revenue growth target while managing ongoing transformation costs. The true test of the restructuring program’s success will depend on whether improved operational efficiency and revenue growth can offset the substantial investment required for the changes.
