HSBC Sees 115% Jump in 2021 Profits, Sides $1B for Share Buyback

HSBC Holdings Plc has reported $18.9 billion in pre-tax profits for 2021, which is up from the previous year’s $8.8 billion, as the lending business is strengthening with the recovering economies from the pandemic.

However, the profits fall short of the $19.1 billion average estimations of 17 analysts that the bank compiled. For the last quarter of the year, the lender reported a 79 percent increase in adjusted pre-tax profits to around $4 billion.

Despite the strong profits, the bank’s Q4 revenue increased by 2 percent to $12 billion, while the yearly figure slipped by 2 percent to $49.6 billion because of low global interest rates and falling income in its markets business. But, the bank is optimistic that the revenue will bounce higher this year with rising rates policies.

“We have good momentum coming into 2022 and are confident that we can continue to execute against our strategy,” said HSBC’s Group CEO, Noel Quinn, who has been leading the bank for the past couple of years.

“We also remain cognisant of the potential impact that further Covid-19-related uncertainty and continued inflation might have on us and our clients.”

The bank has generated 65 percent of its profits from the Asian markets. But, the CEO warned that the lender is expecting weaker wealth performance in Asia in the first quarter of 2022. In addition, it has set the goal of hitting a double-digit return on equity in 2023.

Big Buyback

Having doubled its profits, the bank announced a fresh $1 billion buyback program. It has already completed a share re-purchase worth $2 billion. Further, the bank will distribute a dividend of $0.18 cents.

Meanwhile, HSBC’s publicly listed shares are struggling with the global sharemarket distress over the rising tensions between Russia and Ukraine. Hong Kong-listed shares of the lender went down by 3.7 percent on Tuesday.