By Selena Li and Sumeet Chatterjee

HSBC headquarters is seen at the financial Central district in Hong Kong, China, September 6, 2017. REUTERS/Bobby Yip/File Photo

HONG KONG (Reuters) - HSBC (HSBA.L) on Wednesday said it aims to save $1.8 billion in costs by the end of next year, as its new CEO revamps the bank to boost profit while navigating mixed interest rate policies and profound geopolitical changes.

The Asia-focused lender booked earnings for 2024 that beat market expectations and announced a new $2 billion share buyback which it plans to complete before its next earnings filing.

The figures comes as CEO Georges Elhedery pushes ahead with a costly revamp just as the outlook is muddied by divergence in global interest rate policies, with the euro zone having room to cut rates, the U.S. holding steady and Japan expected to raise.

The bank, which earns bulk of its revenue and profit in Asia, said its 2024 performance came against the backdrop of "significant geopolitical uncertainty, heightened by numerous and consequential elections across the world".

Sino-U.S. tension is a concern for investors in HSBC which counts China as a key market where it has deployed billions of dollars over the past few years. That concern has intensified since the return to the White House of a president who, in his first tenure, implemented a series of anti-China trade policies.

Elhedery became HSBC CEO in September and has since been working to boost returns and intensify the London-headquartered bank's focus on Asia, where it earns the bulk of its profit.

HSBC reported profit before tax for 2024 of $32.3 billion, as income withstood the impact of falling interest rates. That compared with $30.3 billion a year earlier and the $31.7 billion average of analyst estimates compiled by the bank.

The bank said that it aimed for about $300 million in cost reduction in 2025, with a commitment to an annualised reduction of $1.5 billion in cost base by the end of 2026.

"We have renewed vigour in finding the efficiencies that will optimise our resource allocation, be that geographical, business line or balance sheet," Elhedery said in the bank's earnings statement.

"This will enhance the way we actively and dynamically manage costs and capital, and target investments."

HSBC's Hong Kong-listed shares rose after the earnings announcement by as much as 1.8% to HK$88.8, its highest since February 2011. The broader market (.HSI) was down 0.4%.

COST-CUTTING MEASURES

HSBC's headcount fell 3% last year and its staff bonus pool hardly changed from the year earlier as Elhedery sharpened focus on costs, the bank also said on Wednesday.

"Plans to trim personnel expense by 8% over 2025 and 2026 are positive but I don't see a lot of new eye-catching overhaul or cost cutting measures in the release," said Senior Equity Analyst Michael Makdad at Morningstar.