HSBC Annual Results: Bank is pushing even harder in Asia and wants to recoup its dividend

The bank, which is still based in London despite making most of its money in Asia, told investors on Tuesday that it plans to “increase” its investments in the region by about $ 6 billion. It is also moving more resources there, including the relocation of key personnel.

HSBC (HSBC) it has singled out Greater China, Southeast Asia and India as the “key drivers” of its future growth. Specifically, it wants to increase its presence in mainland China, defend its leading position in Hong Kong and establish Singapore as a center for wealth management.
It’s a plan that focuses on a continent that generated more than 80% of HSBC’s profits before the pandemic. Last year, Asia “was once again by far the most profitable region,” President Mark Tucker said in a statement.

The continued focus on Asia came when HSBC announced that its profit before tax fell to $ 8.8 billion last year, a drop of 34% compared to the previous year. Meanwhile, revenue fell 10% to $ 50.4 billion.

Still, that was better than analysts expected. And the bank said Tuesday it aims to restore its dividend “at the earliest opportunity,” starting at 15 cents a share.

Like other lenders, HSBC was forced to eliminate its dividend last year at the request of UK regulators. The Bank of England relaxed some of that guidance in December.

“This was a difficult decision and we deeply regret the impact it has had on our shareholders,” Tucker said in his statement, adding that the board had “adopted a policy designed to provide sustainable dividends in the future.”

Shares of HSBC rose 2.2% in Hong Kong on Tuesday before retreating a bit.

There is also growing speculation that the company will leave parts of its business in other regions while it works to cut costs. This week, for example, the Financial Times reported that HSBC would divest its US retail banking network. HSBC did not confirm that report in its earnings release, saying “we continue to explore strategic options with respect to our US retail franchise.”

However, the bank revealed during its results that it was in talks to sell its retail arm in France.

“[We] they are in negotiations regarding a possible sale, although a decision has not yet been made, “he said.” If any sale is implemented, given the underlying performance of the French retail business, a loss on the sale is expected. “

– This is a developing story and will be updated.


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