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HSBC resumes dividend, increases Asia investment by US$6 billion as last year’s profit decline beats market forecasts
- HSBC to restart dividend, paying 15 US cents a share for 2020
- Annual pre-tax profit was US$8.8 billion, above consensus estimate of US$8.3 billion
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HSBC, the biggest of Hong Kong’s three currency-issuing banks, said it would resume paying dividends to shareholders after a fourth-quarter net profit helped it report a smaller-than-forecast decline in 2020 earnings.
The London-based bank, which generates much of its revenue in Asia, also said it would invest US$6 billion in its wealth management and wholesale banking operations in Asia over the next five years as it places greater emphasis on the region. That would include increasing its wealth sales force in Hong Kong, Singapore and other parts of Southeast Asia.
HSBC cancelled its final 2019 payment and suspended an interim payout last year at the request of its chief regulator in the United Kingdom, raising the ire of retail investors, many of whom are in Hong Kong.
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The bank, Europe’s largest by assets, said it expects to reduce its annual cost base by a further US$1 billion to US$30 billion in the medium term. The lender announced last year plans to cut annual costs by US$4.5 billion and slash 35,000 jobs by 2022.
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“I believe we have a very successful platform already in existence in Asia, particularly in Hong Kong. A lot of that wealth comes from the business customers that we already bank and we have a proven track record of converting that business from wholesale banking to wealth,” HSBC CEO Noel Quinn said on a conference call with journalists. “We’re investing on a strong platform and that’s why I’m confident we can succeed.”
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