HSBC Q1 Pre-tax Profit Drops, Plans Dividends, Up To $3 Bln Share Buyback; Backs FY24 View

(RTTNews) - British lending major HSBC Holdings Plc (HSBA.L, HSBC) reported that its first-quarter profit before tax dropped to $12.65 billion from last year's $12.89 billion.

Profit after tax was $10.84 billion, compared to $11.03 billion a year ago.

However, earnings per share grew to $0.54 from last year's $0.52 on lower share count.

The latest results included a $4.8 billion gain following the completion of the disposal of banking business in Canada, partly offset by a $1.1 billion impairment following the classification of business in Argentina as held for sale.

The reduction in profit before tax also reflected the nonrecurrence of a $2.1 billion reversal last year of an impairment relating to the sale of retail banking operations in France, and a $1.5 billion gain recognised last year on the acquisition of Silicon Valley Bank UK Limited.

Basic earnings per share excluding material notable items and related impacts were $0.34, compared to $0.36 last year.

Net operating income, however, grew to $20.03 billion from $19.74 billion a year ago. Net operating income before change in expected credit losses and other credit impairment charges was $20.75 billion, compared to $20.17 billion a year ago.

Net interest income of $8.7 billion fell by $0.3 billion from last year, primarily reflecting deposit migration. Non-interest income increased.

Net interest margin of 1.63 percent decreased by 6 basis points.

Further, the Board has approved a first interim dividend of $0.10 per share. In addition, following the completion of the sale of banking business in Canada, the Board has approved a special dividend of $0.21 per share, payable in June 2024, alongside the first interim dividend.

The company further said it now intends to initiate a share buy-back of up to $3 billion, to commence shortly after the annual general meeting in May 2024.

Looking ahead for fiscal 2024, the company continues to expect Banking net interest income of at least $41 billion, lower than $44.1 billion recorded in fiscal 2023.

In Hong Kong, HSBC shares were trading at HK$65.50, down 0.1 percent.

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