HSBC said Wednesday it achieved “record profit” in 2023 as pre-tax gains soared by nearly 80 percent, with the banking giant also announcing further share buybacks.
The Asia-focused lender and its peers have been buoyed by rising interest rates for more than a year, but are bracing for greater economic uncertainties in 2024.
The bank generates most of its revenue in Asia and has spent several years pivoting to the region, vowing to develop its wealth business and target fast-growing markets.
Despite bumper profits, HSBC noted the effects of China’s slower-than-expected economic recovery after the Covid-19 pandemic as well as heightened geopolitical tensions.
The firm reported pre-tax profits of $30.3 billion, up from $17.1 billion the year before, in a statement to the Hong Kong stock exchange.
Profit after tax increased by $8.3 billion, to $24.6 billion, while revenue rose by 30 percent to $66.1 billion.
“Our record profit performance in 2023 enabled us to reward our shareholders with our highest full-year dividend since 2008,” said chief executive Noel Quinn.
“This reflected four years of hard work and the strength of our balance sheet in a higher interest rate environment.”
The bank said Wednesday that it would initiate a share buyback of up to $2 billion, following the announcement last year of three share buybacks totalling $7 billion.
It also announced a fourth quarterly dividend of $0.31 per share, bringing the total dividend for 2023 to $0.61 per share.
HSBC said the profits included a “favourable year-on-year impact” of $2.5 billion due to the sale of its French retail banking operations, as well as a $1.6 billion provisional gain recognised on its acquisition of Silicon Valley Bank UK.
The profits were partly offset by a $3 billion impairment charge related to its holding in China’s Bank of Communications — which helped tank HSBC’s fourth-quarter profits by 80 percent to $1 billion.
HSBC said it maintains a 19 percent interest in the Bank of Communications, adding that the Shanghai-based lender “remains a strong partner in China, and we remain focused on maximising the mutual value of our partnership”.
Quinn told Bloomberg the impairment charge was a “technical accounting issue” and had no impact on HSBC’s capital position.