HSBC: Bank’s pre-tax profits soar fuelled by high-interest rates
HSBC, Europe’s largest bank, saw a remarkable surge in its pre-tax profit, skyrocketing by nearly 80% to reach $30.3 billion (£24 billion) in 2023, driven by elevated interest rates.
This notable increase follows a series of interest rate hikes by central banks globally over the past 18 months, aimed at curbing inflationary pressures.
Similarly, NatWest, HSBC’s competitor, disclosed its most substantial annual profit since the onset of the 2007 financial crisis.
However, HSBC’s profit fell short of expectations due to a deceleration in China’s economic growth. Additionally, the bank’s bottom line took a hit from a substantial $3 billion charge stemming from its investment in China’s Bank of Communications.
Primarily generating profits in Asia, particularly in China and Hong Kong, HSBC had anticipated a leap in pre-tax profit from $17.1 billion in 2022 to $34.1 billion in the preceding year, as predicted by analysts.
Noel Quinn, the bank’s CEO, said, “Our record-breaking profit performance in 2023 empowered us to provide our shareholders with the highest full-year dividend since 2008.”
Furthermore, HSBC, headquartered in London, initiated a new $2 billion share buyback as part of its investor reward program, adding to the three previous buybacks totalling $7 billion. Quinn highlighted that the bank returned a total of $19 billion to shareholders over the course of the year.