HSBC annual results: Bank is investing even more in Asia and wants to bring back its dividends

HSBC annual results: Bank is investing even more in Asia and wants to bring back its dividends

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The bank – which is still based in London, although it makes 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 transferring more resources there, including the relocation of some key employees.

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

The continued focus on Asia came when HSBC announced that its pre-tax profit fell to $ 8.8 billion last year, down 34% compared to the previous year. Revenue, in turn, fell 10% to $ 50.4 billion.

Still, this was better than analysts had expected. And the bank said on Tuesday that it plans to reinstate its dividends “at the first opportunity”, starting at 15 cents per share.

Like other creditors, HSBC was forced to discard its dividends 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,” said Tucker in his statement, adding that the board “has adopted a policy designed to provide sustainable dividends in the future.”

HSBC’s shares rose 2.2% in Hong Kong on Tuesday, before backing down a bit.

There is also growing speculation that the company will close part of its business in other regions, as it works to cut costs. This week, for example, the Financial Times reported that HSBC would abandon its network of retail banks in the United States. HSBC did not confirm this report in its earnings release, saying that “we continue to explore strategic options with respect to our retail franchise in the United States”.

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

“[We] are in negotiations regarding a potential sale, although no decision has been made, “he said.” If any sale is implemented, given the underlying performance of the French retail business, a loss in the sale is expected. “

– This is a developing story and will be updated.

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