What Happened
HSBC Holdings (LSE: HSBA) shares surged over 5% in morning trading on February 25, 2025, marking a significant increase of more than threefold over the past five years. This rise follows the bank’s announcement of its full-year results, which, despite a slight decline in profit before tax to $29.9 billion, exceeded analysts’ expectations.
Why It Matters
The decline in profit was primarily attributed to one-off losses and impairments totaling $4.9 billion, linked to restructuring efforts. However, HSBC reported a robust return on tangible equity (RoTE) of 17.2%, excluding these one-offs, and anticipates maintaining a RoTE of at least 17% from 2026 to 2028. The bank’s aggressive cost-cutting measures, which included a 15% reduction in managing director roles, have been implemented six months ahead of schedule, signaling a strategic pivot towards efficiency and performance under CEO Georges Elhedery.
What’s Next
As HSBC continues its overhaul, investors are keenly observing how these internal changes will impact the bank’s operational efficiency and competitive stance, particularly in the Asian market. The stock is currently priced at £12.914, reflecting a 51.4% return over the past year. With ongoing revenue growth expected, the critical question remains: are HSBC shares still good value for investors?