HSBC profit nearly quadruples in first quarter – Kommersant
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Revenue of the British bank HSBC grew in the first quarter by 74%, amounting to $20.2 billion. Net profit almost quadrupled to $10.3 billion. For the first time since 2019, the bank will pay dividends to its shareholders — $0.1 per share. In addition, HSBC announced a $2 billion share buyback. HSBC shares rose 5.7% today, May 2.
The sharp increase in HSBC’s profit is due, among other things, to the continued increase in key rates. However, according to experts, most likely, this increase is approaching its peak, so it will soon become more difficult for banks to maintain high margins. The volume of deposits in HSBC in the first quarter decreased by 0.6% to $1.6 trillion. Other banks are facing similar declines in the face of inflation and rising cost of living. In March HSBC bought for a symbolic £1, the British division of the bankrupt American Silicon Valley Bank.
The bulk of HSBC’s profits come from operations in Asia: although it is headquartered in London, it was originally founded as a Hong Kong bank and activities in the region remain important to it. The largest shareholder of the bank, the Chinese financial holding Ping An, has recently been increasingly demanding that the Asian division of HSBC be separated into a separate company. Then Asian shareholders will receive a large share of the profits, which will be in line with the importance of this region for the bank. “The split could increase the value of a stake in the bank for shareholders in Asia,” said KGI Asia’s chief investment officer, Kenny Wen. HSBC’s management opposes splitting the bank in two and has already called on shareholders to vote against it at its annual meeting this Friday.
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