Company: HBCYF
Filing Date: 2025-02-19
Form Type: 6-K
Source: 0001654954-25-001665
Chunk: 4

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-19
Form: 6-K
Chunk 4
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. We are targeting growth in target basis operating expenses of approximately 3% in 2025 compared with 2024.

- Our target basis operating expenses for 2025 excludes the direct cost impact of the business disposals in Canada and Argentina, notable items and the impact of retranslating the prior year results of hyperinflationary economies at constant currency.

- Our cost target includes the impact of simplification-related saves associated with our announced reorganisation, which aims to generate approximately $0.3bn of cost reductions in 2025, with a commitment to an annualised reduction of $1.5bn in our cost base expected by the end of 2026. To deliver these reductions, we plan to incur severance and other up-front costs of $1.8bn over 2025 and 2026, which will be classified as notable items. We are focused on opportunities where we have a clear competitive advantage and accretive returns, and we aim to redeploy around $1.5bn of additional costs from non-strategic activities into these areas, over the medium term.

- We expect ECL charges as a percentage of average gross loans to continue to be within our medium-term planning range of 30bps to 40bps in 2025 (including lending held for sale balances).

- Over the medium to long term, we continue to expect mid-single digit percentage growth for year-on-year customer lending balances.

- We expect double-digit percentage average annual growth in fee and other income in Wealth over the medium-term.

- We intend to continue to manage the CET1 capital ratio within our medium-term target range of 14% to 14.5%, with a dividend payout ratio target basis of 50% for 2025, excluding material notable items and related impacts.

Our targets and expectations reflect our current outlook for the global macroeconomic environment and market-dependent factors, such as market-implied interest rates (as of mid-January 2025) and rates of foreign exchange, as well as customer behaviour and activity levels.

We do not reconcile our forward guidance on RoTE excluding the impact of notable items, target basis operating expenses, dividend payout ratio target basis or banking NII to their equivalent reported measures.

| Key financial metrics                                               
 Reported results                                                    | For the year ended 
               2024 |      2023 |      2022 |
|:--------------------------------------------------------------------|-------------------:|----------:|----------:|
| Profit before tax ($m)                                              |             32,309