HSBC on Monday said pre-tax profit fell in the first half of 2022 but it intends to resume quarterly dividends next year as its annual outlook remained positive.
The firm said it made US$9.175 billion before tax, down more than 15 percent on-year.
Chief executive Noel Quinn said “it reflected a more normalised level of expected credit losses compared with the Covid-19 releases made last year, as well as the macroeconomic impact of the Russia-Ukraine war”.
The annual revenue outlook was positive, he said, as net interest income is expected to reach at least US$31 billion this year and US$37 billion next year as global interest rates rise.
Quinn said the group is confident of achieving its best returns in a decade in 2023.
“We also intend to revert to quarterly dividends in 2023,” he added.
London-headquartered HSBC was among a number of major banks to cancel their dividends early in the pandemic following a de facto order from the Bank of England — a move that upset some Hong Kong shareholders.
The plan to resume payout came before HSBC executives’ first face-to-face meeting with shareholders Tuesday from the Asian financial hub in three years.
The executives are expected to field questions about a restructuring bid from its biggest shareholder Ping An Insurance Group.
The lender is under pressure from Ping An, which has a 9.2 percent stake, to spin off its Asian operations, in a bid to unlock shareholder value amid tensions between China and the west.
Quinn and chairman Mark Tucker have not publicly commented on Ping An’s campaign, but the bank has hinted it wants to keep its current structure while continuing a pivot to Asia, Bloomberg reported.
Hong Kong politician Christine Fong said on Sunday tht HSBC separating its Asian business and bringing back its primary listing to the city is the “best way to protect (the interests of) minority shareholders”.
Fong, who reportedly represents 500 small investors in HSBC stock, also voiced support for Ping An getting seats on HSBC’s board, citing the cancelled dividends in 2020 as a reason.
Last year, HSBC vowed to accelerate a multi-year pivot to Asia and the Middle East, with ambitions to lead Asia’s wealth management market.
The bank said it would invest $6 billion in Hong Kong, China and Singapore and hire more than 5,000 wealth advisers — while slashing 35,000 jobs and cutting its retail operations in the United States and France.
HSBC has commissioned Goldman Sachs and advisory firm Robey Warshaw to rebuff Ping An’s campaign, according to Bloomberg.