HONG KONG: HSBC on Monday said it would resume paying dividends to shareholders after first-half profits more than doubled as an ongoing restructuring and pivot to Asia continues to pay off.
The results beat analyst estimates and are a shot in the arm for the Asia-reliant lender after a tumultuous 2020 saw its fortunes take a hammering from the coronavirus and simmering geopolitical tensions.
Reported profit before tax rose $6.5 billion to $10.8 billion while reported profit after tax increased $5.3 billion to $8.4 billion.
The bank also announced an interim dividend of seven cents per ordinary share for the first half of the year.
British regulators last year ordered banks to suspend payouts as the coronavirus tore through the global economy to shore up liquidity. But last month they relaxed those “temporary guardrail” measures.
HSBC is one of the biggest dividend payers in European banking, and after a year of restrictions is expected to set aside more than any of its rivals this year and next.
“We definitely feel more confident,” CFO Ewen Stevenson told Bloomberg. “We will keep buybacks under review” together with dividends, he added.
HSBC shares were trading up 2.3 per cent in Hong Kong shortly after the results were released.
Like all banking giants, HSBC was battered by the coronavirus last year, with a 30 per cent plunge in 2020 profit.
Under CEO Noel Quinn, it has embarked on a dramatic restructuring, rolling out plans to cut its workforce by about 35,000 to drive down costs and to refocus on its most profitable areas — Asia and the Middle East.
HSBC makes 90 per cent of its profit in Asia, with China and Hong Kong the major drivers of growth.
In February it published a new strategy laying out plans to redouble its attempt to seize more of the Asian market.
Weighed down by low-interest rates, it is planning to seek out more fee-based income, especially wealth management for Asia’s increasingly affluent.
Earlier this year the bank sold its 90 branches in the United States and completed long-running disposal of its unprofitable French retail business.
“We are focused on executing the growth and transformation plans we announced in February,” Quinn said, noting all geographical regions of the global bank were currently returning a profit.
— AFP
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