HSBC Holdings reports 77.9% surge in pre-tax profit for last year, plans substantial share buyback

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21st February 2024 – (Hong Kong) HSBC Holdings (00005) unveiled its financial performance for the previous year, revealing a robust 77.91% year-on-year increase in pre-tax profit, reaching US$30.348 billion (approximately HK$236.7 billion). Despite falling short of market expectations, the bank’s earnings per share stood at US$1.15. In line with this positive outcome, HSBC announced the distribution of a fourth-quarter dividend of US$0.31 per share, bringing the total dividend for 2023 to US$0.61 per share. Additionally, the bank revealed plans for a share buyback program potentially reaching US$2 billion.

The bank’s total revenue experienced a significant 30% growth, reaching US$66.1 billion. This increase was primarily driven by a surge in net interest income, which rose by US$5.4 billion. The net interest margin also saw a 24 basis point increase, reaching 1.66%. Moreover, HSBC managed to reduce its projected credit losses by US$100 million, totalling US$3.4 billion. The common equity Tier 1 capital ratio witnessed a 0.6 percentage point increment, reaching 14.8%. This growth in capital was partially offset by dividends and share buybacks.

Looking ahead, HSBC aims to achieve an average return on tangible equity of approximately 15% by 2024. The bank plans to maintain its medium-term target range for the common equity Tier 1 capital ratio between 14% and 14.5%, while keeping the dividend payout ratio at 50% for the year 2024.