The money house achieves a large part of its earnings in Asia.
(Photo: dpa)
London Since the Chinese insurance group Ping An has called for the split of the major bank HSBC, its CEO Noel Quinn has been under constant pressure on earnings. With a firework of good news, the top manager is now trying to silence the activist major shareholder: HSBC not only increased the dividend for the past 2022 financial year from 25 to 32 cents, but also signaled its shareholders a special distribution of 21 cents. Quinn also envisages a share buyback in 2023.
The warm rain of money for shareholders is also possible because HSBC was able to increase its adjusted profit before tax to $ 5.2 billion in the last quarter of 2022. Profit for the full year, on the other hand, fell slightly from $18.9 billion to $17.5 billion, which was mainly caused by special write-downs after the sale of the private customer business in France. In Germany, the bank was able to keep its revenues at the level of the record year 2021 at almost 900 million euros.
However, HSBC once again earned most of its money, around 80 percent of its consolidated profits, in Asia. That’s a key reason why Ping An has been pushing for a spin off of its Asia operations from the rest of the bank for about a year.
HSBC pulled out of several regions in 2022. In addition to its retail banking business in France, the bank also sold its Canadian business for around $10 billion, which now allows it to pay a special dividend. By the middle of the year, the financial house also intends to cut its business ties to Russia and expects a loss of around $300 million as a result.
However, CEO Quinn insists that HSBC’s global structure has survived despite the geopolitical tensions and the trend towards economic decoupling between East and West: “Customers are demanding more international banking services, not less,” said the Brit, who has been in business since March 2020 at the helm of HSBC when presenting the balance sheet. Quinn will soon sit down with his critics of Ping An, which owns about 8 percent of the big bank.
“Customers are demanding more international banking services, not less.”
(Photo: Reuters)
Stock is at its highest level in three years
After initial hesitation, the markets reacted positively to the business development. By midday, the stock was up more than 3 percent and is currently at its highest level in more than three years. Since Quinn took the helm, the market value has increased by around 25 percent.
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HSBC owes the good result above all to rising interest rates worldwide. As a result, the interest margin – the difference between interest income and interest expenses – improved from just under 1.2 to 1.74 percent in the final quarter of 2022.
For the year as a whole, it was 1.48 percent and thus similar to that of its competitor Standard Chartered. Overall, interest income at HSBC last year was a good $32 billion after $26 billion in the previous year.
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Some analysts were not satisfied with the relatively conservative forecast for the current financial year. “The market was hoping for a little more good news in the forecast,” said Steve Clayton of British investment house Hargreaves Lansdown.
His colleague Alastair Ryan, an analyst at Bank of America in London, spoke of “typical caution” at HSBC. He rated the interest income of $36 billion expected by the bank for 2023 as the minimum target.
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