HSBC reports a beat and a raise as it leapfrogs Wells Fargo by market cap

Dow Jones02-25 21:31

MW HSBC reports a beat and a raise as it leapfrogs Wells Fargo by market cap

By Jules Rimmer

Pretax profit exceeded consensus forecasts by 9%

HSBC's earnings both exceeded analysts' expectations and will force them to raise their forecasts for the coming year

HSBC delivered a "beat and a raise" with its annual results on Wednesday, and traders reacted accordingly, pushing the shares up more than 5% in trading on the London Stock Exchange. As a result, its market capitalization passed Wells Fargo $(WFC)$, putting it fifth among the world's biggest banks by market capitalization.

London-headquartered HSBC (UK:HSBA) reported a pretax profit of $29.9 billion for 2025, some 9% ahead of consensus and revenues of $68.2 billion. It exceeded estimates of $67.4 billion. At the same time, CEO Georges Elhedery's guidance for 2026 net interest income was 5% above current expectations. He said the company hopes to achieve its $1.5 billion cost-reduction goal this summer, some six months ahead of schedule.

Bright spots included the performance of HSBC's $(HSBC)$ wealth division and its Hong Kong business, which saw revenues jump 6% amid a significant increase in lending to its Asian client base.

Elhedery previously indicated a strategic shift policy to operate a more "Wall-Street-style approach," rewarding high performers with bigger compensation packages. The bonus pool set aside for employees jumped about 10% to $3.93 billion, the highest in 10 years.

Citi analyst Andrew Coombs said these numbers create roughly 6% upside to the forecasts for 2026. Coombs also noted the merger with Hang Seng Bank will mean more growth. "HSBC is a consensus long - but those longs should be vindicated today," Coombs said.

Having broken through the GBP200 billion ($270 million) market capitalization threshold Wednesday morning, HSBC is valued at $298 billion - behind JPMorgan Chase $(JPM)$, Bank of America (BAC) and Chinese banks Industrial & Commercial Bank of China (CN:601398) and Agricultural Bank of China (CN:601288). The share-price jump has also brought HSBC within 10% of overtaking AstraZeneca (UK:AZN) as the largest stock in the FTSE 100 index.

Before the earnings announcement, the mean target price of the dozen or so analysts was GBP12.74, now about 7% below current market levels. HSBC's stock has rallied 15% so far in 2026 and was up almost 50% in the last 12 months.

-Jules Rimmer

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February 25, 2026 08:31 ET (13:31 GMT)

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HSBC reports a beat and a raise as it leapfrogs Wells Fargo by market cap

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