HSBC brings back dividend as profit more than doubles to $10.8 billion
By Michelle Toh, CNN Business
HSBC’s profits soared in the first half of the year as its business staged a strong recovery from the worst of the coronavirus pandemic.
The British bank also confirmed Monday that it would bring back its interim dividend after it was forced to scrap it last year at the request of UK regulators. The Bank of England relaxed some of that guidance in December, and formally removed it in July.
HSBC will now pay out 7 cents per share for the first half of the year.
Banks have been raising their dividends lately as a sign of optimism about their ability to navigate the months ahead. This summer, Morgan Stanley, JPMorgan Chase and Bank of America all increased their payouts.
The HSBC news, which was highly anticipated, came as the London-based lender posted $10.8 billion in pre-tax profit for the first six months of 2021, marking a 151% jump compared with the same period last year, during the pandemic.
HSBC’s shares in Hong Kong, its biggest market, rose 1.9% on Monday.
“These are good results that reflect the return of growth in our main markets and marked progress in the execution of our strategy. We were profitable in every region in the first half of the year,” CEO Noel Quinn said in a statement.
HSBC has undergone a series of shakeups in recent years, even prior to the pandemic.
It announced in February that it would push even harder into Asia, increasing investments in the region by about $6 billion and identifying China, southeast Asia, and India as “key drivers” of its future growth.
While the company remains focused on those plans, it still has to contend with its single “biggest challenge,” the Covid-19 crisis, Quinn said Monday.
The bank has also been working to restructure “our portfolio of businesses in the first half of the year, investing in businesses that we intend to grow and withdrawing from areas in which we lack the scale to compete,” he noted.
Quinn pointed to changes in HSBC’s US and European businesses, where it recently announced plans to sell off chunks of its retail operations, as examples of the group’s “progress.”
“I’m pleased with the momentum generated around our growth and transformation plans,” he added.
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