HSBC, Standard Chartered dividends in focus as banks seen delivering stronger half-year results

Name: US warns American companies about operating in Hong Kong, sanctions 7 Chinese officials
Uploaded: 2021-08-01T04:30:09.000Z
Duration: 2 min 3 s
Description: US warns American companies about operating in Hong Kong, sanctions 7 Chinese officials

HSBC, Standard Chartered resumed paying dividends this year after suspending payouts in 2020 to preserve capital during the pandemic

Prudential Regulation Authority in July discarded ‘temporary guardrails’ put in place after banks resumed dividend payouts

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HSBC’s and Standard Chartered’s main buildings in Hong Kong’s Central district. HSBC kicks off earnings season for the city’s biggest banks when it reports its first-half results on Monday. Photo: Bloomberg

Chad Bray

Published: 12:30pm, 1 Aug 2021Updated: 8:29pm, 1 Aug 2021

Investors will be watching this week to see whether HSBC and Standard Chartered resume paying interim dividends as the lenders prepare to report their first-half results against the backdrop of a sharp economic recovery in Hong Kong, their single biggest market.

HSBC will be the first of the city’s three currency-issuing banks to update investors on its half-year performance on Monday, followed by Standard Chartered on Tuesday and Bank of China (Hong Kong) later this month.

Other big banks with operations in the city that are expected to report their results this week include Hang Seng Bank, which is majority owned by HSBC; Singapore’s DBS Group Holdings[ and Oversea-Chinese Banking Corp, the parent of OCBC Wing Hang.

Hopes for a payout have increased as some of HSBC’s and Standard Chartered’s UK peers announced plans for interim dividends and share buy-backs last week. The Prudential Regulation Authority (PRA), an arm of the Bank of England, last month removed a series of “temporary guardrails” that constrained the amount they could distribute to shareholders when they resumed dividends this year.

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US warns American companies about operating in Hong Kong, sanctions 7 Chinese officials

“Their dividend restrictions have been lifted by BoE, paving the way for an interim dividend,” Citi analyst Yafei Tian said in a research note. “Domestic HK banks [also] could be allowed to increase dividend payout ratios given robust asset quality and strong capital.”