China blot

Soaring interest rates drive HSBC to record profit

HSBC’s profits were dented by the slowdown in China (pic: HSBC)

HSBC said high interest rates helped drive the Asia-focused bank to record results despite a slowdown in its biggest market.

Full-year pre-tax profit soared 78% to £30.3 billion (£24bn) in 2023 from $17.5bn in the previous 12 months.

However, a $3bn (£2.3bn) impairment from its stake in a Chinese bank, the Bank of Communications, meant it undershot forecasts. Adebt crisis in China’s real estate sector has spread to hit investment and spending more widely.

It announced a $2bn share buyback and total dividends for 2023 of $0.61 per share. HSBC added that it would consider a special dividend of $0.21 per share in the first half of 2024 once it had completed the disposal of its business in Canada.

Group chief executive Noel Quinn said: “Our record profit performance in 2023 enabled us to reward our shareholders with our highest full-year dividend since 2008, three share buy-backs last year totalling $7bn (£5.5bn) and a further share buy-back of up to $2bn (£1.5bn).

“This reflected four years of hard work and the strength of our balance sheet in a higher interest rate environment.

Mr Quinn added: “We have a strong platform for growth with the opportunities that exist within our two home markets and across our international wholesale, market-leading transaction banking, and wealth management businesses.

“We are focused on capturing these growth opportunities, improving our earnings sustainability and targeting mid-teens returns in 2024.”

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