HSBC beat expectations in its 2021 first-half earnings, and announced its second dividend payout since the Covid-19 pandemic as the global economy bounces back.
The bank's reported pre-tax profit more than doubled from a year ago to $10.84 billion in the January-to-June period this year. Analysts' estimates compiled by the bank had pointed to a $9.45 billion in reported pre-tax profit during that period.
Meanwhile, revenue fell 4.5% from a year ago to $25.55 billion in the first six months of 2021 — broadly in line with the $25.52 billion that analysts had projected.
HSBC shares in Hong Kong jumped more than 3% following earnings release.
HSBC's Group Chief Executive Noel Quinn said a brighter economic outlook has allowed the bank to start releasing provisions that were set aside for potential loan losses. That was the "main driver" of the bank's improved profitability.
"We were profitable in every region in the first half of the year," Quinn said in a statement accompanying the earnings release. "This performance enables us to pay an interim dividend for the first six months of 2021," he added.
The bank announced an interim dividend of $0.07 per ordinary share.
Here are the other highlights from HSBC's earnings report:
- The bank released a net $719 million in reported expected credit loss, thanks to a better economic outlook.
- Net interest margin, a measure of lending profitability, was 1.21% in the first half of 2021. That's 22 basis points lower than the same period last year.
- The bank said it targets a dividend payout ratio of 40% to 55% of reported earnings per ordinary share for 2021.
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