Georges Elhedery, the veteran CEO of HSBC, has announced that his comprehensive turnaround of Europe’s largest bank is almost over. This milestone was marked by the announcement of a $3.9bn staff bonus pool, the highest the bank has paid out in more than ten years. Despite a slight dip in overall profit to $29.9bn, the bank’s performance was significantly stronger than the $28.9bn predicted by analysts.
Elhedery’s strategy has involved a dramatic simplification of the bank, including the reorganization of divisions and the removal of senior management layers. This has helped the bank’s London-listed shares soar by 50% in 2025 alone. Elhedery, who received a total pay package of £14.4m for the year, believes the bank is now perfectly positioned for a fast-changing global economy.
The bank’s financial health remains strong, with a market value now reaching $300bn. HSBC was able to achieve its $1.5bn cost-saving target much faster than expected, highlighting the success of Elhedery’s efficiency measures. Even with $4.9bn in one-off charges, the bank’s core operations continue to generate significant revenue, particularly in its Asian hubs.
A key area of concern remains the bank’s exposure to the Chinese property sector, which resulted in a $2.1bn write-off last year. Despite this, the bank is moving forward with its $13.7bn deal to integrate Hang Seng Bank, which is expected to yield nearly $1bn in synergies. The bank has also set a high bar for future profitability, targeting a 17% return on tangible equity.
As the bank looks to 2026 and beyond, it faces the challenge of balancing low cost growth with the need for high-tech investments. Analysts remain skeptical of the 1% cost-increase forecast, especially given the rapid pace of AI development in the banking sector. However, with the leadership of Elhedery and new chair Brendan Nelson, HSBC appears ready to tackle these future hurdles.