HSBC Holdings, Plc. (NYSE:HSBC) shares traded higher on Tuesday after the company reported first-quarter results.
Revenue decreased 13% year over year (Y/Y) to $17.6 billion due to business divestments, mainly in Canada and Argentina.
Constant currency revenue, excluding notable items, increased 7% Y/Y to $17.7 billion. Banking net interest income (NII) declined to $10.6 billion from $10.9 billion in the quarter.
Customer loans stood at $945 billion, and deposits came in at $1.67 trillion. At the end of the quarter, the CET1 ratio was 14.7%.
The company's expected credit losses stood at $0.9 billion in the first quarter of 2025.
Adjusted EPS of $1.95, up from $1.70 a year ago quarter.
Buyback: On April 25, HSBC completed a $2 billion share buyback announced alongside its full-year 2024 results.
The bank intends to initiate a share buyback of up to $3 billion, which is expected to start shortly after the annual general meeting on May 2 2025 and to be completed within the period before the 2025 interim results announcement.
Outlook: For FY25, HSBC continues to target banking NII of around $42 billion and mid-teens return on average tangible equity in each of the three years from 2025 to 2027.
The bank aims to target cost factors in savings from the reorganization, expecting $0.3 billion in reductions in 2025 and an annualized $1.5 billion cut by the end of 2026.
HSBC says that achieving this will require $1.8 billion in severance and other upfront costs over 2025-2026. The bank anticipates Expected Credit Loss (ECL) charges between 30-40 basis points in 2025.
HSBC foresees muted lending growth but strong growth in its Wealth business while maintaining a stable Common Equity Tier 1 (CET1) ratio.
Investors can gain exposure to the stock via Precidian ETFs Trust HSBC Holdings plc ADRhedged (NYSE:HSBH) and Elevation Series Trust The Opal International Dividend Income ETF (BATS:IDVZ).
Price Action: HSBC shares are up 2.29% at $57.63 at the last check Tuesday.
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