Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Singapore/London — HSBC reported quarterly profit rocketed 92%, beating estimates, as rising interest rates swelled net interest income, prompting Europe’s largest bank to offer long-suffering investors a dividend and share buyback bonanza.
The London-headquartered bank said on Tuesday it intended to pay a special dividend of $0.21 per share, as a priority use of the proceeds from the $10bn sale of its Canada business, once that disposal is complete late this year.
The bank’s asset disposals have picked up pace in the last year as it fends off pressure from its biggest shareholder, Ping An Insurance, which has urged the bank to split off its Asian business to boost returns, a move against which HSBC has pushed back.
“With the delivery of higher returns, we will have increased distribution capacity, and we will also consider a special dividend once the sale of HSBC Canada is completed,” group CEO Noel Quinn said in a statement.
Quinn, who has overseen a programme of job cuts in recent years aimed at stripping out layers from the bank’s bloated management structure, said more was to come. “There will be no easing off at all on costs. We are now considering up to $300m of additional costs for severance in 2023,” he said.
The Asia-focused bank, which counts Hong Kong as its biggest market, also said it will return to paying quarterly dividends in 2023, and would bring forward the consideration of fresh share buybacks to the first quarter of 2023.
HSBC, however, did not raise its key performance target of reaching a return on tangible equity of at least 12% from this year onwards, a goal that some analysts had expected would be upgraded given the boost in lending income from rising rates.
It reported pretax earnings of $5.bn for the fourth quarter, up from $2.7bn a year earlier and ahead of the $4.96bn average estimate of analysts compiled by the bank.
HSBC said annual expected credit losses rose to $3.6bn, more than the $3.2bn analysts had estimated, due to rising inflation pressuring borrowers and lingering problems in China's property market.
Despite the fourth-quarter surge, annual profit fell to $17.5bn from $18.9bn for 2021, due to an impairment of $2.4bn related to the sale of its retail banking operations in France.
That matched the $17.5bn average estimate of 22 analysts compiled by the bank.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
HSBC profit nearly doubles
Singapore/London — HSBC reported quarterly profit rocketed 92%, beating estimates, as rising interest rates swelled net interest income, prompting Europe’s largest bank to offer long-suffering investors a dividend and share buyback bonanza.
The London-headquartered bank said on Tuesday it intended to pay a special dividend of $0.21 per share, as a priority use of the proceeds from the $10bn sale of its Canada business, once that disposal is complete late this year.
The bank’s asset disposals have picked up pace in the last year as it fends off pressure from its biggest shareholder, Ping An Insurance, which has urged the bank to split off its Asian business to boost returns, a move against which HSBC has pushed back.
“With the delivery of higher returns, we will have increased distribution capacity, and we will also consider a special dividend once the sale of HSBC Canada is completed,” group CEO Noel Quinn said in a statement.
Quinn, who has overseen a programme of job cuts in recent years aimed at stripping out layers from the bank’s bloated management structure, said more was to come. “There will be no easing off at all on costs. We are now considering up to $300m of additional costs for severance in 2023,” he said.
The Asia-focused bank, which counts Hong Kong as its biggest market, also said it will return to paying quarterly dividends in 2023, and would bring forward the consideration of fresh share buybacks to the first quarter of 2023.
HSBC, however, did not raise its key performance target of reaching a return on tangible equity of at least 12% from this year onwards, a goal that some analysts had expected would be upgraded given the boost in lending income from rising rates.
It reported pretax earnings of $5.bn for the fourth quarter, up from $2.7bn a year earlier and ahead of the $4.96bn average estimate of analysts compiled by the bank.
HSBC said annual expected credit losses rose to $3.6bn, more than the $3.2bn analysts had estimated, due to rising inflation pressuring borrowers and lingering problems in China's property market.
Despite the fourth-quarter surge, annual profit fell to $17.5bn from $18.9bn for 2021, due to an impairment of $2.4bn related to the sale of its retail banking operations in France.
That matched the $17.5bn average estimate of 22 analysts compiled by the bank.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Pernod Ricard accused of making $23m in illegal profits in India
Standard Chartered launches $1bn buyback and says it is not for sale
Barclays to reduce funding for oil and gas projects
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.