Asia-focused British lender HSBC beat analyst forecast, more than doubling profits in the first half after a significant reduction in credit loss provisions.
HSBC posted $8.4 billion of profit after tax, according to its first-half interim report, a 170% increase compared to $3.1 billion in the same period last year.
The expected release of credit loss provisions drove profits higher with revenues down around 4 percent to $25.6 billion and adjusted operating expenses rising by 3 percent.
These are good results that reflect the return of growth in our main markets and marked progress in the execution of our strategy, said HSBC group chief executive Noel Quinn highlighting four main pillars of the bank’s plans: focusing on strengths, digitizing at scale, energizing for growth, and transitioning to net zero.
The mix of HSBC’s results by region is also noteworthy as it registered profits across Asia, Middle East and North Africa, North America, Latin America and even Europe – HSBC UK Bank plc posted profit before tax of over $2.1 billion in the period – which has reported consecutive halves of pre-tax losses.
We were profitable in every region in the first half of the year, supported by the release of expected credit loss provisions.
HSBC also paid an interim dividend of $0.07 per ordinary share in the first half, noting that the bank is moving towards its planned target.
The Group maintains a strong capital position and is well placed to fund growth and step up capital returns,» the bank said.
Reflecting the current improved economic outlook and operating environment in many of our markets, we now expect to move to within our target dividend payout ratio range of 40% to 55% of reported earnings per ordinary share in 2021.