Net profit surged 56 percent last year to US$22.4 billion, the London-headquartered group said in a statement. Pre-tax gains hit a record $30.3 billion following a 80-percent gain.
Despite also announcing further share buybacks, shares in HSBC slumped in London and Hong Kong, shedding 7.8 and 4.0 percent respectively.
In the fourth quarter alone, HSBC profits took a hammering following a $3-billion impairment linked to its 19-percent stake in China's Bank of Communications, which was hit by property loan writeoffs.
HSBC stressed that the Shanghai-based lender "remains a strong partner in China".
It added: "We remain focused on maximising the mutual value of our partnership."
- 'Dim view' -
"Investors took a dim view of the impairment charge associated with the bank's Chinese investment, dampening sentiment around the Asia-focused bank," noted Joshua Mahony, chief market analyst at trading group Scope Markets.
"With continued concerns around the Chinese real estate sector, and global interest rates expected to fall, investors are taking a somewhat cautious approach after both earnings and revenues fell short of expectations."
HSBC reported expected credit losses of $3.4 billion in 2023, "notably related to mainland China commercial real estate exposures".
China's property market woes have continued to weigh down the country's economic growth, with the most debt-ridden developer Evergrande recently handed a liquidation order in a Hong Kong court.
Bloomberg Intelligence analyst Tomasz Noetzel said HSBC's $3-billion impairment charge related to Bank of Communications "appears to rightly capture the deteriorating outlook for China's economy and shouldn't be a surprise".
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.
HSBC noted the effects of China's slower-than-expected economic recovery after the Covid-19 pandemic as well as heightened geopolitical tensions.
Nevertheless, HSBC is "confident in the resilience of the Chinese economy, and the growth opportunities in mainland China over the medium to long term", said the bank's chief executive Noel Quinn.
HSBC said group revenue jumped 30 percent to more than $66 billion last year. It announced a $0.31 interim dividend, bringing its payout for the year to $0.61 a share.
"Our record profit performance in 2023 enabled us to reward our shareholders with our highest full-year dividend since 2008," Quinn said.
"This reflected four years of hard work and the strength of our balance sheet in a higher interest rate environment."
The bank said it planned to repurchase up to $2 billion worth of its shares, following buybacks totalling $7 billion last year.
News of bumper dividends and share buybacks would usually give a boost to a company's share price.
HSBC added the profits included a "favourable year-on-year impact" of $2.5 billion from the sale of its French retail banking operations, as well as a $1.6-billion gain on its acquisition of Silicon Valley Bank UK.
burs-hol/bcp/rfj/gv
Related Links
Global Trade News
| Subscribe Free To Our Daily Newsletters |
| Subscribe Free To Our Daily Newsletters |
