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 exceeded expectations with earnings for the first half of 2021 and announced its second dividend payout since the Covid-19 pandemic as the global economy recovers.
Reported pre-tax profit for the bank more than doubled from January to June this year year over year to $ 10.84 billion. Analyst estimates compiled by the bank had indicated a reported pre-tax profit of 9.45 billion US dollars during this period.
Meanwhile, revenue for the first six months of 2021 fell 4.5% year over year to $ 25.55 billion – largely in line with analysts’ forecast of $ 25.52 billion.
Hong Kong HSBC stock rose more than 3% after the earnings release.
HSBC’s group chief executive Noel Quinn said the better economic outlook had allowed the bank to release provisions for potential loan losses. That was the “main driver” of the bank’s improved profitability.
“We were profitable in every region for the first half of the year,” Quinn said in a statement accompanying the results release. “This performance enables us to pay out an interim dividend for the first half of 2021,” he added.
The bank announced an interim dividend of $ 0.07 per common share.
Here are the other highlights from HSBC’s earnings report:
- The bank released an expected credit loss of $ 719 million net thanks to a better economic outlook.
- The net interest margin, a measure of the profitability of lending, was 1.21% for the first half of 2021. That is 22 basis points less than in the same period last year.
- For 2021, the bank is aiming for a dividend payout ratio of 40 to 55 percent of reported earnings per common share.