HSBC reported pre-tax profits of $5.2bn for the final three months of last year, surpassing analysts’ expectations, and said it would consider handing shareholders a special dividend when it completes the sale of its Canadian business.
The London-listed bank’s profits rose more than 90 per cent from the same period a year earlier as higher interest rates boosted revenues.
Still, the bank’s pre-tax profit for the full year fell by $1.4bn, partly because of an impairment on the planned sale of its retail banking operations in France.
Chief executive Noel Quinn said “2022 was another good year for HSBC”, adding: “We completed the first phase of our transformation and our international connectivity is now underpinned by good, broad-based profit generation around the world.”
The bank has approved total dividends of 32 cents per share for 2022, and said the special dividend would be a “priority use of the proceeds” from the sale of its Canadian business to Royal Bank of Canada for $10bn.
Net interest income rose to $32.6bn for the full year, up from $26bn in 2021, a sign of how far rising interest rates have helped boost banks’ profits. HSBC, one of the world’s largest deposit-taking institutions, is particularly sensitive to changes in rates.
The bank reported $3.6bn in expected credit losses and other impairments for the year, which it said reflected “increased economic uncertainty [from] inflation, rising interest rates and supply chain risks” as well as China’s real estate crisis.