HSBC raises staff bonuses 10% after better-than-expected yearly earnings

HSBC has increased its staff bonus pool by 10% to $3.9bn (£2.9bn) after reporting annual results that exceeded market expectations, marking the largest payout to bankers in more than a decade.

The London-headquartered lender said the bonus pot was determined following a review of financial and non-financial performance metrics. The increase comes despite a 7% decline in pre-tax profit to $29.9bn for 2025, a figure that nonetheless beat City forecasts by about $1bn, the Guardian reported.

The stronger-than-expected earnings reassured investors, sending HSBC’s London-listed shares up 5% in morning trading on Wednesday.

Chief executive Georges Elhedery, who took the helm in 2024, said the bank’s multi-year overhaul was nearing completion. He described HSBC as “becoming a simpler, more agile, focused bank built for a fast-changing world”, according to the Guardian.

Elhedery received a total pay package of £14.4m for 2025, up 9% from £13.2m a year earlier.

The results follow an extensive restructuring drive aimed at saving $1.5bn in costs. HSBC said it was on track to achieve those savings six months earlier than planned. Elhedery has reorganised the bank along east-west operating lines, exited certain investment banking operations in the US and Europe, and reduced senior management layers.

Those measures have helped lift investor confidence. HSBC’s shares surged 50% in 2025 and have gained a further 10% so far this year, giving the bank a market value of around $300bn, according to the Guardian.

However, the 2025 profit figure was weighed down by $4.9bn in one-off charges. These included a $2.1bn write-off related to HSBC’s stake in China’s Bank of Communications, reflecting the prolonged downturn in China’s property sector. Pre-tax profit in mainland China fell 66% to $1.1bn.

The bank also recorded $1.4bn in legal provisions and $1bn in restructuring and related costs.

HSBC said it would pay a final dividend of 45 cents per share, in addition to 30 cents distributed earlier in the year. The combined payout remains below the 87 cents distributed for 2024.

The lender has raised its return on tangible equity target to 17% or better through 2028, up from a previous “mid-teens” goal. The ratio stood at 13.3% last year.

Analysts at Jefferies, cited by the Guardian, said investors would likely welcome the earnings beat but may question the bank’s forecast of only a 1% rise in costs in 2026, given competitive pressures and planned investment in artificial intelligence.

The results underline HSBC’s attempt to balance shareholder returns, investment in technology and exposure to Asia — where it generates most of its profits — while navigating volatility in China and global banking markets.

With restructuring largely complete, the focus now shifts to whether HSBC can sustain higher returns and disciplined cost growth in a more competitive and technology-intensive environment.