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Dividends, strategy in focus as HSBC, Standard Chartered prepare to report full-year results

  • HSBC, Standard Chartered suspended their dividends at request of UK regulator in April
  • HSBC CEO Noel Quinn expected to update shareholders on ongoing strategy shift

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Investors are expecting HSBC and Standard Chartered to announce plans to restart their dividends when they report their full-year results beginning on Tuesday. Photo: Bloomberg
Chad Bray

HSBC and Standard Chartered are expected to unveil plans to restart paying dividends to shareholders, as the lenders prepare to report their fourth-quarter results this week against the backdrop of increasing optimism about a return to more normal business conditions.

HSBC will be the first of Hong Kong’s three currency-issuing banks to report its full-year results on Tuesday, while its 62.1 per cent-owned Hang Seng Bank will also report on the same day. Standard Chartered will follow on Thursday. Bank of China (Hong Kong) is expected to report its results alongside its mainland China parent on March 30.

Standard Chartered and HSBC halted their dividends and share buy-backs last April following a request by their chief regulator in the United Kingdom, sparking a rebellion among shareholders in Hong Kong, their largest market. Both banks are based in London, but generate much of their revenue in Asia.

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The lenders have said that they hope to resume investor payouts when they report their full-year results, after the Prudential Regulation Authority, an arm of the Bank of England, said in December it was comfortable with UK banks restarting their dividends. HSBC has said any payouts would be “conservative”, with a view to increasing them in the future.

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“After the removal of the dividend restriction and the comfort of lowering high loan provisions, HSBC and SCB should exhibit better revenue,” said Jacob Doo, chief investment officer at Envysion Wealth Management. “But that is due primarily to lower provisions rather than an improvement in the top-line number. Credit quality should start to improve with credit cost normalisation, which will help their earnings.”

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