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Sunday, Oct 02, 2022

HSBC sees recovering economic growth help boost profits

HSBC sees recovering economic growth help boost profits

HSBC chief executive Noel Quinn has cheered recovering economic growth in many of the bank’s main markets, as the company recorded a jump in profits.
Quinn said: “We were profitable in every region in the first half of the year, supported by the release of expected credit loss provisions.”

The update follows a number of upbeat results from banks last week, with Barclays, NatWest and Lloyds Banking Group all recording higher profits.

HSBC, Europe’s largest lender, reported pretax profits of $10.8 billion (£7.8 billion) in the six months to June 30, up from $4.3 billion a year earlier. Second quarter profits also jumped.

The growth came despite revenue declining 4%, with profits helped by the release of credit loss provisions. The bank had a strong period for mortgages and also highlighted growth in Asia.

HSBC plans to pay a dividend of 7c a share for the first half of the year.

HSBC cautioned that uncertainty remains as countries emerge from the pandemic at different speeds and government support measures unwind.

But Quinn added: “I’m pleased with the momentum generated around our growth and transformation plans.”

The FTSE 100 UK-based company wants to focus on its fast-growing Asian operations and scale back underperforming businesses in Europe and the US.

Hargreaves Lansdown analyst Susannah Streeter said: “The banking bounce back has continued with HSBC doubling first half pre-tax profits as economies come out of their defensive hiding places and the spectre of bad debt recedes.”

Meanwhile, HSBC is moving to a hybrid working model where possible. The firm has plans to reduce its global office footprint by more than 3.6 million square feet- or around 20%- by the end of 2021.

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