HSBC (NYSE:HSBC) Posts Quarterly Earnings Results, Beats Expectations By $0.25 EPS

HSBC (NYSE:HSBC) released its quarterly earnings results on Wednesday. The financial services provider reported $1.85 earnings per share for the quarter, beating analysts’ consensus estimates of $1.60 by $0.25, Zacks reports. The business had revenue of $17.72 billion for the quarter, compared to the consensus estimate of $17.01 billion. HSBC had a return on equity of 12.78% and a net margin of 12.85%.

Here are the key takeaways from HSBC’s conference call:

• Delivered a strong full‑year performance with $36.6bn profit before tax, RoTE 17.2%, ordinary dividend up 14% to $0.75, and set targets for year‑on‑year revenue growth rising to 5% by 2028 and RoTE ≥17% for 2026–28.
• Completed the $13.7bn privatization of Hang Seng Bank to consolidate the Hong Kong franchise and target ~$0.9bn of synergies by 2028, but the deal reduces CET1 (≈110bp post‑close) and involves a $0.6bn restructuring notable item.
• Transformation is creating funding for growth — management reports ~$1.5bn of annualized simplification savings delivered ahead of plan, ~$1.8bn being reallocated to priority areas, and guidance for 1% target‑basis cost growth in 2026 while still investing in tech and wealth capabilities.
• Credit and asset‑quality watch: guidance for an ~40bp ECL charge in 2026 and ongoing monitoring of Hong Kong commercial real estate (credit‑impaired CRE with LTV>70% ≈ $1.9bn and ECLs ≈ $0.9bn), which could pressure provisions or capital if conditions worsen.

HSBC Stock Down 0.6%

HSBC stock traded down $0.54 during trading hours on Thursday, hitting $93.66. The stock had a trading volume of 1,641,713 shares, compared to its average volume of 2,268,469. The stock’s 50-day moving average price is $84.10 and its 200-day moving average price is $74.24. HSBC has a 12-month low of $45.66 and a 12-month high of $94.78. The company has a quick ratio of 0.92, a current ratio of 0.92 and a debt-to-equity ratio of 0.49. The stock has a market capitalization of $321.73 billion, a P/E ratio of 19.71, a price-to-earnings-growth ratio of 0.94 and a beta of 0.52.

More HSBC News

Here are the key news stories impacting HSBC this week:

• Positive Sentiment: Q4 earnings beat and upgraded outlook: HSBC reported $1.85 EPS (ahead of consensus) and revenue above estimates; management raised medium‑term income/returns targets, supporting higher forward earnings expectations. Earnings Press Release
• Positive Sentiment: Shareholder cash return & cost progress: HSBC declared a fourth interim dividend (USD 0.45) and says it hit ~£1.1bn of cost savings early — both support shareholder returns and margin improvement. Dividend / Data Pack
• Positive Sentiment: Balance-sheet monetisation: HSBC has launched the sale of its Singapore life insurance product manufacturing business, targeting >$1bn — potential to crystallize value and boost capital. Reuters: Singapore sale
• Positive Sentiment: Institutional buying: Brucke Financial filed a new stake purchase (~8,181 shares, ~$573k), signaling investor appetite from funds. Stake Filing
• Positive Sentiment: Market reaction: European equities hit record highs in part on HSBC’s stronger results and raised lending targets — positive sentiment for the bank shares broadly. Market Reaction
• Neutral Sentiment: Research visibility: HSBC research is promoting a bullish software/AI theme (“Software will eat AI”) and analyst notes on large tech names — raises franchise value but is not a direct earnings driver. CNBC: Software/AI piece
• Neutral Sentiment: Targeted job cuts: HSBC cut ~10% of its U.S. debt capital markets team as part of restructuring — could reduce costs but may signal selective business pullback. Cost Actions
• Negative Sentiment: Buybacks limited by capital: FT reports HSBC says capital ratios need improvement before resuming buybacks — this delays a major direct channel for returning cash to shareholders. FT: Capital ratios
• Negative Sentiment: Board/governance concerns: FT coverage notes increased non‑exec fees amid criticism of the botched chair succession process — raises governance scrutiny risk. FT: Board fees

Institutional Trading of HSBC

Institutional investors and hedge funds have recently modified their holdings of the business. Morgan Stanley lifted its holdings in shares of HSBC by 15.3% during the fourth quarter. Morgan Stanley now owns 7,483,883 shares of the financial services provider’s stock valued at $588,757,000 after purchasing an additional 993,473 shares in the last quarter. HRT Financial LP purchased a new stake in shares of HSBC during the 4th quarter valued at about $13,874,000. Marshall Wace LLP bought a new stake in shares of HSBC in the fourth quarter worth approximately $13,300,000. Northern Trust Corp raised its holdings in shares of HSBC by 4.7% during the third quarter. Northern Trust Corp now owns 3,045,134 shares of the financial services provider’s stock valued at $216,144,000 after purchasing an additional 136,342 shares during the last quarter. Finally, Raymond James Financial Inc. boosted its holdings in HSBC by 34.6% in the third quarter. Raymond James Financial Inc. now owns 455,088 shares of the financial services provider’s stock worth $32,302,000 after purchasing an additional 117,038 shares during the last quarter. Institutional investors own 1.48% of the company’s stock.

Wall Street Analyst Weigh In

A number of equities research analysts have issued reports on HSBC shares. Bank of America raised shares of HSBC from a “neutral” rating to a “buy” rating in a report on Wednesday, December 10th. Weiss Ratings restated a “hold (c+)” rating on shares of HSBC in a report on Monday, December 29th. Citigroup reiterated a “buy” rating on shares of HSBC in a report on Friday, January 9th. Zacks Research raised shares of HSBC from a “hold” rating to a “strong-buy” rating in a research report on Monday, November 3rd. Finally, Keefe, Bruyette & Woods raised shares of HSBC from a “hold” rating to a “moderate buy” rating in a research note on Wednesday, December 17th. One research analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating and four have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $63.00.

About HSBC

HSBC Holdings plc (NYSE: HSBC) is a multinational banking and financial services organization headquartered in London. It traces its origins to the Hongkong and Shanghai Banking Corporation, founded in 1865 to facilitate trade between Europe and Asia, and has since grown into one of the world’s largest banking groups. The company is publicly listed in multiple markets, including the London Stock Exchange, the Hong Kong Stock Exchange and as an American depositary receipt on the New York Stock Exchange.

HSBC operates a universal banking model, serving retail, commercial, corporate and institutional clients.