HSBC: a disappointing Q4, caution for 2024

(CercleFinance.com) - On Wednesday, HSBC reported Q4 profit that is well below expectations, due to the recognition of several charges, causing its share price to stumble on the London Stock Exchange.


The British bank, which has a strong presence in Asia, posted Q4 pre-tax profit of $1bn, compared with over $5bn a year earlier.

This is well below the consensus of of around $4.75bn.

The financial services group explained that its accounts were burdened by a $3bn write-down on its investment in Chinese lender BoCom, one of its business partners.

HSBC also says it had to record an impairment provision on its retail banking subsidiary in France, now considered part of discontinued operations.

For the full year, profit before income tax rose to $30.3bn, on the back of a 30% increase in net banking income to $66.1bn.

In a press release, CEO Noel Quinn points to a "record" 2023 performance, which enabled the payment of an annual dividend of $0.61 per share, the highest since 2008.

In addition, $7bn in share buy-backs have been achieved, soon to be supplemented by a new share buy-back program of up to $2bn.

Analysts fear, however, that FY 2023 will have been a high point for the banking giant, both in terms of earnings and redistributions to shareholders.

For 2024, HSBC said it was aiming for a return on tangible equity (RoTE) ratio of around 15%, but was also 'cautious' about loan growth, as well as about the economy as a whole.

Following these announcements, the share price fell by almost 7% on Wednesday morning, posting the biggest drop in the FTSE 100 index.


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