HSBC Holdings plc update
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HSBC became the latest European bank to resume its dividend payout and cut the amount set aside to cover loan losses related to the coronavirus pandemic. This will help drive revenue growth in the second quarter by nearly five percent as the global economic outlook improves. Times.
The bank said on Monday that its pre-tax profit soared from US$1.1 billion to US$5.1 billion, exceeding expectations of US$3.7 billion. It also announced that it had cancelled another US$300 million in credit reserves.This is in stark contrast to billions of dollars in loan loss expenses Took last year As the coronavirus swept the world, it effectively wiped out net income.
Although HSBC has released approximately US$700 million in bad debt reserves this year, it has retained approximately US$2.4 billion in reserves related to the new crown virus and warned of the recovery because Delta variation spread.
“In the first half of the year, we achieved profitability in every region [and] We expect strong economic growth in the second half of the year,” CEO Noel Quinn said in an interview.
He added that the bank expects interest rates in the U.S. and U.K. Rise in 2022 Or in 2023, this could significantly increase the earnings of one of the world’s largest depository institutions.
This performance marked a turnaround from the bleak 2020, when HSBC’s annual profit Plummeted 45% As banks have been hit by ultra-low interest rates, slowing trade and the effects of the global blockade.
The London-based bank announced an interim dividend of 7 cents per share, valued at approximately US$1.4 billion.Bank of England Remove restriction Shareholder dividends in July judged that the industry has sufficient flexibility to withstand any further impact from Covid-19.However, unlike Some of its counterparts, HSBC did not announce a stock repurchase plan.
The bank’s shares rose 1.6% in Hong Kong on Monday.
HSBC’s Bank of England is a bright spot, with a loss of US$857 million and a profit of US$1.1 billion last year.This was driven by the largest regional loan loss release and a record quarter for mortgages Global housing prices are skyrocketing.
Although profits have rebounded, due to lower interest rates in Asia and poor performance of investment banks compared with their peers, revenue fell 4% to US$12.6 billion.
Jefferies analyst Joseph Dickerson said the transaction was the main “weakness” in the results. Fixed income income fell by 59% and foreign exchange income fell by 34%—worse than most of the bank’s competitors—reflecting the market’s inactivity compared to the same period last year and the lack of international travel during the pandemic.
Similarly, revenue from M&A advisory and capital markets fell by 7%, while Big gain In recent weeks, its share price has soared 160% in rival Barclays Bank, and UBS, An increase of 68%. This resulted in a 23% decrease in revenue in this sector overall.
Despite these setbacks, HSBC increased the amount used to pay bonuses by £367 million during the quarter, even though the number of employees in the department has decreased by 3,500 this year.
“There is nothing in the numbers that is relevant to us, [the investment bank] 2021 is expected to be better than 2019, [whereas] 2020 is an extraordinary year,” said Chief Financial Officer Ewen Stevenson. “We cut our salary by 20% last year and we have to deal with competitive pressures. “
Investment banks have Increase primary wages Reached $100,000 or more after complaints against the industry in recent months Hard working conditions -Especially during the pandemic, the long time away from home-and the battle for talent.
Under Quinn’s leadership, HSBC has begun to reshape its huge global business, promising to cut costs by US$4.5 billion and lay off 35,000 employees.This year, it sold its Loss-making U.S. consumer business and French Retail Bank Free up capital to invest in Asia.
It also launched a US$6 billion plan to expand its Asian wealth business and has already move Some of its most senior managers traveled from London to Hong Kong.
Compared to any other global bank, HSBC is used as Political sandbag During the US-China trade war and Beijing’s suppression of Hong Kong, it faced doubts about its future.Quinn vowed no Strategic “trigger” Tensions erupted every time.
Under Joe Biden’s leadership, these tensions have not subsided. China is planning to legislate in Hong Kong to prohibit foreign companies and individuals operating in this financial center from complying with sanctions against it.
The proposed Anti-sanctions law Distressed multinational companies such as HSBC may face greater uncertainty and more problems.
“As an international bank, you must understand the laws of each market in which you operate,” Quinn said of the proposed policy. “Sometimes these are complicated, [but] For the past 10 years, we have been dealing with complex sanctions laws. “