SINGAPORE (Reuters) – HSBC reported a 15% drop in first-half profit due to higher provisions for bad debts, but the fall was not as severe as expected and the biggest bank in Europe raised its profit forecast on the belief that higher interest rates will boost earnings.
In a sign of growing confidence in its ability to improve profitability despite global economic uncertainties, HSBC raised its short-term return on tangible equity target to at least 12% from 2023.
The London-based bank on Monday reported pre-tax profit of $9.2 billion (8.99 billion euros) for the six months to June 30, down from $10.84 billion. dollars recorded a year ago, but higher than the average forecast of $8.15 billion compiled by HSBC from analyst data.
The bank said it will pay an interim dividend of 9 cents per share and intends to return to paying quarterly dividends beginning in early 2023. It also said share buybacks remain low. likely this year.
“We understand and appreciate the importance of dividends to all of our shareholders. We will strive to restore the dividend to pre-COVID-19 levels as soon as possible,” chief executive Noel Quinn said in a statement.
Shares of Hong Kong-listed HSBC, which were initially in the red, rallied again and were up more than 2.5% in trading on Monday afternoon.
HSBC said Asia’s share of earnings rose to 69% in the first half from 64% a year ago.
The bank announced a $1.1 billion charge for expected credit losses as heightened economic uncertainty and rising inflation put more of its borrowers in trouble.
(1 euro = .0228)
(Report Anshuman Daga and Lawrence White, French version Augustin Turpin, edited by Matthieu Protard)
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