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HSBC Holdings PLC is preparing to unveil $1.5 billion of annual cost savings as part of a restructuring under Chief Executive Georges Elhedery, according to the Financial Times. Europe‘s largest lender will lay out the figures for the first time next Wednesday, when Elhedery presents full-year results to investors, the FT said. It is expected to report $1.5 billion in savings from the changes after one-time costs, according to FT sources. HSBC declined to comment. Elhedery announced a sweeping reorganisation in October, weeks after taking the reins, to reduce duplication and help strip out costs from an organisation that has long had a reputation as a lumbering bureaucracy. The chief executive said the plans would result in a ‘simpler, more dynamic and agile organisation’. Central to Elhedery’s plans are changes to how the London-based group is organised. It now has individual units dedicated to its two core markets of the UK and Hong Kong, one unit focused on corporate and institutional banking, and another for international wealth and premier banking. The reorganisation has meant meshing the commercial and investment banks, two of HSBC‘s three divisions in its old structure, the FT noted. ‘Combining them has enabled Elhedery to reduce the number of bankers doubling up in different geographies - particularly in the senior ranks - and much of the belt-tightening so far has come from redundancies. He has cut the number of top managers by about half,’ the FT added. Citi predicts HSBC will report fourth quarter underlying pretax profit of $7.0 billion next week, 4% above company collected consensus, and reported pretax profit of $1.9 billion after adjusting for foreign exchange charges on Argentina divestment. Citi expects superior revenue to consensus, and sees a Banking net interest income beat by 2% and lower impairment charges by 3%. Citi also see a 35 US cents dividend per share and another $3 billion share buyback. It expects 2025 NII guidance of more than $32 billion, above consensus of $31.8 billion. It also expects HSBC to extend 2025 return on tangible equity guidance of around 14% to 16% to 2026 to 2027 as well. Shares in HSBC were 0.7% lower at 870.00 pence each in London on Friday. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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