HSBC has announced a final dividend of 45 cents per share, bringing the total for the year to 75 cents, alongside a massive $3.9bn bonus pot for its staff. While the dividend is lower than the previous year’s record payout, the bank’s better-than-expected $29.9bn pre-tax profit has kept investor sentiment high. The bank’s stock rose 5% on the news, continuing a trend of strong market performance.
The bank’s bonus pool, up 10% from the previous year, is the largest in over a decade and was determined by a rigorous review of performance metrics. CEO Georges Elhedery emphasized that the bank is now more focused and efficient following his wide-ranging overhaul. Elhedery’s own compensation rose to £14.4m, reflecting his successful leadership during this period of transition.
Under Elhedery’s guidance, HSBC has simplified its operations and concentrated on its most profitable Asian units. This strategy has led to a 50% increase in the bank’s share price over the past year. The lender is also on track to save $1.5bn in costs six months earlier than planned, further boosting its financial standing.
The bank did have to contend with significant one-off costs, including $1bn in restructuring fees and a $2.1bn write-off in China. The Chinese real estate slump has been a persistent challenge, leading to a 66% drop in profit for the bank’s mainland division. To bolster future earnings, the bank is focusing on the $900m in synergies expected from its Hang Seng Bank merger.
Looking toward 2028, HSBC is targeting a return on tangible equity of at least 17%. Analysts have noted that while the results are impressive, the bank’s forecast of only a 1% rise in costs for 2026 may be difficult to maintain. With a new chair and a completed overhaul, the bank is now shifting its focus toward long-term profitability and technological innovation.