HSBC beats expectations, saying that pre-tax earnings were up 79% in the first quarter
Pedestrians in protective masks walk past a logo displayed in an HSBC bank branch in the central district of Hong Kong.
Roy Liu | Bloomberg | Getty Images
HSBC, Europe’s largest lender by asset, reported pre-tax profit for the first quarter that beat estimates but posted a decline in sales.
The London-headquartered bank, which generates most of its revenue in Asia, announced that reported profit before tax increased 79% year over year to $ 5.8 billion. According to HSBC estimates, it exceeded analysts’ expectations of $ 3.34 billion.
Reported revenue for the quarter was down 5% year over year to $ 13 billion, still driven by low interest rates, the bank said.
“We had a good start to the year to support our customers while delivering significantly improved ROI for our shareholders,” said Noel Quinn, group chief executive at HSBC, in a statement. “I am satisfied with our sales and cost development, but especially with our significantly lower expected credit losses.”
“We made further progress in reducing costs and risk-weighted assets, and introduced new products and features in areas of strength,” added Quinn.
According to HSBC, all regions were profitable in the first quarter.
The bank announced in February that it will not be paying quarterly dividends in 2021, but will instead consider making an interim payout for its half-year results in August. As of 2022, the bank is aiming for a payout ratio of between 40% and 55% of reported earnings per share, according to the latest earnings release.
Hong Kong-listed HSBC shares were up 0.44% ahead of earnings release.
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