HSBC's 1H profit more than doubles as economies rebound


HSBC said it had given the brighter outlook globally as economies recover better than expected from the pandemic.

HONG KONG/LONDON: HSBC Holdings on Monday reported forecast-beating first-half pretax profit that more than doubled from a weak performance last year when it made huge provisions for pandemic-related bad loans.

Encouraged by an economic rebound in Hong Kong and Britain, its two biggest markets, HSBC reinstated dividend payments and released $700 million that had been set aside to cover potential bad loans. That compares with $6.9 billion in loan-loss provisions made in the same period a year ago.

Pretax profit for Europe's biggest bank by assets came in at $10.8 billion versus $4.32 billion in the same period a year earlier and was higher than the $9.45 billion average of 15 analysts' estimates compiled by the bank.

Revenue, however, fell 4% due to the low interest rate environment.

HSBC said it had given the brighter outlook globally as economies recover better than expected from the pandemic, it expects credit losses to be below its medium-term forecast of 0.3%-0.4% of its loans.

The bank also said that for the year, it could even make a net release of funds from earlier provisions rather than add to them, but it was hard to say definitely due to the unknown impact of government support programmes, vaccine rollouts and new strains of the virus.

It plans to pay an interim dividend of seven cents a share after the Bank of England scrapped payout curbs last month.

Reflecting its better than expected loan performance, HSBC will move to within its target payout range of 40-55% of reported earnings per share within 2021, it added. - Reuters

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