HSBC more than doubles 2021 pre-tax profit amid continued recovery
22 February, 2022
HSBC, Europe's largest lender, said its full year 2021 pre-tax profit more than doubled and the bank announced a $1 billion share buyback, amid a continued global economic recovery.
Pretax profit surged to $18.9bn last year, up from $8.8bn in 2020 driven by a net release of expected credit losses and other credit impairment charges and a higher share of profit from the bank's associates, it said in a statement on Tuesday.
The results missed the $19.1 billion average estimate of 17 analysts compiled by HSBC itself. All regions were profitable in 2021, notably HSBC UK, where reported profit before tax increased by $4.5bn to $4.8bn. The lender's Asia operations contributed $12.2bn to reported profit before tax and all other regions reported a material recovery in profitability.
HSBC said it released $900 million it had provisioned for bad loans spiked, compared with an $8.8bn charge it booked against expected losses in 2020. The bank's board approved a second interim dividend of $0.18 per share, making a total for 2021 of $0.25 per share and the lender plans a further share buy-back of up to $1bn, after the existing up $2bn buy-back is concluded.
“We made good progress against our strategy in 2021, which contributed to a strong financial performance that was supported by the global economic recovery. Noel Quinn, HSBC group chief executive, said.
“All of our regions were profitable and we saw growth in the fourth quarter of 2021 in many of our business lines.”
Fourth quarter profit before tax increased by $1.3bn to $2.7bn, as expenses and provisions for anticipated bad loans fell, while revenue grew. Adjusted profit before tax surged 79 per cent to $4bn.
Adjusted revenue in the fourth quarter rose 2 per cent to $12.1bn. The lender booked expected credit losses of $500 million, which included an increase in allowances to reflect developments in China’s commercial real estate sector.
"Good progress has been made in executing our strategic plan. A number of key milestones were reached in 2021 – including resolving the future of our retail businesses in France and the US, the organic build-out of HSBC Personal Wealth Planning in mainland China, and acquisitions in Singapore and India to accelerate the development of our wealth capabilities across Asia," said Mark Tucker, group chairman.
"At the same time, our work to digitise HSBC and to play a leading role in the net zero transition has continued at pace. There is more to do – and it will be important to see successive consecutive quarters of growth – but good momentum exists across our businesses."
Source: www.thenationalnews.com