HSBC’s third-quarter results have exceeded expectations, propelling its shares to a six-year high. Shares are currently 3.71% higher at 717.8 pence on the London Stock Exchange.
The London-based bank, which derives most of its earnings from Asia, reported a pre-tax profit of US$8.5bn — a 10% increase year-on-year — surpassing analyst forecasts of US$7.6bn. This performance was driven largely by growth in its wealth management and wholesale banking segments, alongside strong customer activity in foreign exchange and debt markets.
Accompanying these earnings, HSBC launched a fresh US$3bn share buyback program, marking the second multibillion-dollar buyback initiative this year. Combined with an additional US$1.8bn dividend payout, HSBC’s total 2024 distributions to shareholders now stand at US$9bn.
In a move that sparked market interest, CEO Georges Elhedery also outlined a strategic restructuring, splitting HSBC’s global operations into “eastern” and “western” markets. Elhedery addressed speculations regarding a potential breakup, clarifying, “This is not a precursor to a split. Our customers value HSBC’s global connectivity, and we’re streamlining our business to serve them better.” The reorganisation aims to cut costs, reduce redundancies, and enhance decision-making efficiency, reflecting a response to pressure from investors like Chinese insurer Ping An, which has advocated for heightened focus on HSBC’s profitable Asian market.
This restructuring includes job cuts, primarily at senior levels, as part of HSBC’s cost-saving measures, with further details expected in February.
