On Wednesday, HSBC, the largest banking institution in Europe, announced a pre-tax profit of $32.31 billion for the year, slightly falling short of analysts’ expectations, primarily due to a $3.1 billion decrease in net interest income compared to the previous year.

For the complete fiscal year, HSBC’s revenue amounted to $65.85 billion, down from $66.1 billion in 2023.

Here’s how HSBC’s annual performance compares with LSEG’s average estimates:

• Pre-tax Profit: $32.31 billion compared to $32.63 billion
• Revenue: $65.85 billion versus $66.52 billion

The bank’s pre-tax earnings for the fourth quarter nearly doubled from the previous year to $2.3 billion, recovering from a $3 billion impairment charge that affected last year’s quarterly performance. However, revenue for this quarter dropped 11% to $2.3 billion.

HSBC announced a share repurchase plan of up to $2 billion, expected to conclude by the end of the first quarter of 2025.

According to Morningstar analyst Michael Makdad, the buyback aligns with market expectations, and the bank’s commitment to cost-cutting through 2025 and 2026 is viewed positively.

In its announcement, HSBC outlined a strategy to reduce annual costs by $1.5 billion by the close of 2026.

Looking ahead, HSBC anticipates a banking net interest income of $42 billion in 2025, down from $43.7 billion in 2024.

These results mark the first complete fiscal year since Georges Elhedery took on the role of CEO in July, following Noel Quinn’s retirement.

After the earnings update, shares of HSBC, listed in Hong Kong, fell by 0.29%.

In related news, HSBC recently laid off around 40 investment bankers in Hong Kong, as reported by Reuters. The areas most impacted include M&A, consumer finance, real estate, and resources and energy sectors.

Last October, HSBC revealed plans for a significant reorganization, detailed in an announcement that outlined a shift to four distinct business units, aimed at creating a dedicated “Eastern markets” division and a “Western markets” counterpart.

“We are in the process of establishing a more streamlined, agile banking structure that amplifies our core strengths. This involves developing four distinct, complementary businesses, aligning our organizational framework with our strategic goals, and swiftly reshaping our portfolio,” Elhedery stated.

According to their statement, this restructuring initiative is expected to yield approximately $300 million in cost savings by 2025.