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Our strategy is working, CEO says as HSBC posts better-than-expected pre-tax profit of US$12.9 billion for first quarter
- Lender to pay first quarterly dividend since 2019, having not paid a quarterly dividend since it cancelled its final dividend payment that year and suspended its dividend in 2020
- HSBC facing pressure from some shareholders to split the bank at its annual general meeting on Friday
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Chad Brayin London
HSBC, the biggest of Hong Kong’s three currency-issuing banks, reported a better-than-expected profit in the first quarter as it seeks to fend off renewed pressure from some shareholders to split up the bank.
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The bank, one of Europe’s largest by assets, said its net profit rose to US$10.3 billion for the three months ended March 31, from US$2.8 billion in the same period a year earlier.
On a pre-tax basis, HSBC reported a profit of US$12.9 billion, ahead of the US$8.6 billion expected by analysts.
“What we see in the [first-quarter] results is evidence that the strategy is working,” Noel Quinn, the bank’s CEO, said on a call with journalists. “We’ve said for awhile that we thought the safest and fastest way to grow returns, to grow dividends and to impact the valuation of the bank is to deliver on the strategy that we embarked upon three years ago. I think the [first-quarter] results reinforce that view. We think that’s good for all shareholders and that’s our primary focus.”
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The quarterly results included a previously announced reversal of a US$2.1 billion impairment related to the planned sale of HSBC’s French retail bank as completion of the transaction has become “less certain”, and a provisional gain of US$1.5 billion on its acquisition of the UK arm of collapsed US lender Silicon Valley Bank (SVB). HSBC acquired the SVB arm in a government-negotiated rescue for £1 (US$1.25).
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