HSBC 2023 profit surges, announces $2 bln buyback

Investing.com-- Asia-focused lender HSBC Holdings PLC (HK:0005) (LON:HSBA) clocked weaker-than-expected profit growth for 2023, but still marked a record-high pre-tax profit as it benefited greatly from higher interest rates across the globe, with the bank also announcing an up to $2 billion buyback.

HSBC’s profit before tax for the year to December 31 rose to $30.3 billion from $17 billion a year ago, but missed Bloomberg estimates for a profit of $34.12 billion. 

The bank’s annual revenue rose 30% to $66.1 billion, it said in a release on the Hong Kong stock exchange, with its net interest income surging to $35.8 billion from $30.38 billion a year ago.

The bank declared a fourth interim dividend of 31 cents per share, bringing its total 2023 dividend to 61 cents per share- nearly twice the 32 cents seen in 2022. 

HSBC also announced a share buy-back of up to $2 billion, which it intends to complete within the next three months. 

Shares of the firm rose 1% in Hong Kong trade after the earnings, as the bank appeared to have benefited from higher global interest rates while seeing limited impact from its exposure to a credit slowdown in Hong Kong and China. 

“We have a strong platform for growth with the opportunities that exist within our two home markets and across our international wholesale… transaction banking, and wealth management businesses. We are focused on capturing these growth opportunities, improving our earnings sustainability and targeting mid-teens returns in 2024,” CEO Noel Quinn said in a statement. 

HSBC forecast a 2024 net interest income of at least $41 billion, that it will target a dividend payout ratio of at least 50% for the year.

The bank also plans to further reduce costs and said that its outlook for loan growth remained “cautious” for the first half of 2024.