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monabri wrote:My "losses" in HSBA have narrowed significantly in the last few weeks. Another 7.3p on the shareprice and I will be in the black. The question then will be what to do next? Holding for the moment hoping that the annual results on 22nd February keep the momentum going and the dividend receives a tickle!
Noel Quinn, Group Chief Executive, said:
“We made good progress against our strategy in 2021, which contributed to a strong financial performance that was supported by the
global economic recovery. All of our regions were profitable and we saw growth in the fourth quarter of 2021 in many of our business
lines.
We have good momentum coming into 2022 and are confident that we can continue to execute against our strategy. We also remain
cognisant of the potential impact that further Covid-19-related uncertainty and continued inflation might have on us and our clients.”
2021 financial performance (vs 2020)
• Reported profit after tax up $8.6bn to $14.7bn and reported profit before tax up $10.1bn to $18.9bn. The increase was
driven by a net release of expected credit losses and other credit impairment charges (‘ECL’) and a higher share of profit from our
associates. Adjusted profit before tax up 79% to $21.9bn.
• All regions were profitable in 2021, notably HSBC UK Bank plc, where reported profit before tax increased by $4.5bn to
$4.8bn. Our Asia operations contributed $12.2bn to reported profit before tax and all other regions reported a material recovery in
profitability, reflecting favourable ECL movements.
• Reported revenue down 2% to $49.6bn, primarily reflecting the impact of lower global interest rates and a decrease in revenue in
Markets and Securities Services (‘MSS’) compared with a strong comparative period. Notwithstanding these factors, we saw revenue
growth in areas of strategic focus, including Wealth, in part due to favourable market impacts in life insurance manufacturing, and
Global Trade and Receivables Finance (‘GTRF’). Adjusted revenue down 3% to $50.1bn.
• Net interest margin (‘NIM’) of 1.20%, down 12 basis points (‘bps’) from 2020, with stabilisation in the second half of 2021.
• Reported ECL were a net release of $0.9bn, compared with an $8.8bn charge in 2020, reflecting an improvement in
economic conditions relative to 2020, and better than expected levels of credit performance.
• Reported operating expenses broadly unchanged at $34.6bn. Adjusted operating expenses down 1% to $32.1bn, despite
inflationary pressures, as the impact of our cost-saving initiatives and a reduction in the UK bank levy charge absorbed higher
performance-related pay and continued growth in technology investment.
• Customer lending balances in 2021 up $8bn on a reported basis and $23bn on a constant currency basis, primarily driven by
growth in mortgage balances, mainly in the UK and Hong Kong.
• Common equity tier 1 (‘CET1’) capital ratio of 15.8%, down 0.1 percentage points. Capital generation was more than offset
by dividends, the up to $2bn share buy-back announced in October, foreign exchange movements and other deductions. Riskweighted assets (‘RWAs’) reduced despite new Pillar 1 requirements for structural foreign exchange, reflecting actions under our
transformation programme.
• The Board has approved a second interim dividend of $0.18 per share, making a total for 2021 of $0.25 per share. We
also intend to initiate a further share buy-back of up to $1bn, to commence after the existing up to $2bn buy-back has concluded.
4Q21 financial performance (vs 4Q20)
• Reported profit after tax up $1.1bn to $2.0bn and reported profit before tax up $1.3bn to $2.7bn, reflecting lower ECL
charges, lower operating expenses and revenue growth. Adjusted profit before tax up 79% to $4.0bn.
• Reported revenue up 2% to $12.0bn, mainly in Commercial Banking (‘CMB’) from growth in Credit and Lending and GTRF.
Adjusted revenue up 2% to $12.1bn.
• Reported ECL were a net charge of $0.5bn, which included an increase in allowances to reflect recent developments in China’s
commercial real estate sector.
• Reported operating expenses down 3% to $9.5bn due to a lower UK bank levy and further cost savings, partly offset by a $0.6bn
impairment of goodwill related to our Wealth and Personal Banking (‘WPB’) business in Latin America. Adjusted operating
expenses down 8% to $8.3bn.
Outlook
We carry good business momentum into 2022 in most areas and expect mid-single-digit lending growth over the year. However, we
expect a weaker Wealth performance in Asia in the first quarter of 2022.
We expect ECL charges to normalise towards 30bps of average loans in 2022, based on current consensus economic forecasts and
default experience, noting we retain $0.6bn of Covid-19-related allowances as at the end of 2021. Uncertainty remains given recent
developments in China’s commercial real estate sector, while inflationary pressures persist in many of our markets.
We continue to target 2022 adjusted operating expenses in line with 2021, despite inflationary pressures, with cost to achieve spend of
$3.4bn expected to generate over $2bn of cost savings in 2022. In 2023, we intend to manage growth in adjusted operating expenses to
within a range of 0% to 2%, compared with 2022 (on an IFRS 4 basis), with cost savings of at least $0.5bn from actions taken in 2022
helping to offset inflation.
We expect mid-single-digit RWA growth in 2022 through a combination of business growth, acquisitions and regulatory changes, partly
offset by additional RWA savings. This growth, together with capital returns are expected to normalise our CET1 position to be within our
14% to 14.5% target operating range during 2022.
Our net interest income outlook is now significantly more positive. If policy rates were to follow the current implied market consensus,
we would expect to deliver a RoTE of at least 10% for 2023, one year ahead of our previous expectations.
We continue to target dividends within our 40% to 55% dividend payout ratio range.
And later;
Second interim dividend for 2021
After the end of the year, the Directors approved a second interim dividend in respect of the financial year ended 31 December 2021 of
$0.18 per ordinary share, a distribution of approximately $3,649m. The second interim dividend for 2021 will be payable on 28 April 2022
to holders on the Principal Register in the UK, the Hong Kong Overseas Branch Register or the Bermuda Overseas Branch Register on
11 March 2022. No liability was recorded in the financial statements in respect of the second interim dividend for 2021.
HSBC will be holding an audio webcast presentation and conference call today for investors and analysts. The speakers will be Noel Quinn (Group Chief Executive) and Ewen Stevenson (Group Chief Financial Officer).
A copy of the presentation to investors and analysts is attached and is also available to view and download at https://www.hsbc.com/investors/results- ... ting/group .
Full details of how to access the conference call appear below and details of how to access the webcast can also be found at http://www.hsbc.com/investors/results-and-announcements .
Time: 8 .30am (London); 4.30pm (Hong Kong); and 3.30am (New York).
Dod101 wrote:I am interested that no one has any comment on the results from HSBC which is I think actually quite widely held.
Dod
funduffer wrote:I am puzzled why the dividend announced for the 2021 final results is called an 'interim 2' dividend.
Are HSBC planning to revert back to 4 payments per year?
Has the dividend timetable changed again?
Any ideas what is going on?
FD
Dod101 wrote:As I think I said earlier they appear to have settled in to two dividend payments per year.
ADrunkenMarcus wrote:Dod101 wrote:As I think I said earlier they appear to have settled in to two dividend payments per year.
The same with Barclays. They used to be twice yearly, then they resumed in 2009 on a quarterly basis and reverted to twice a year in the Staley years. I believe Lloyds announced a move to quarterlies in 2020 but then it became irrelevant as they suspended. I assume their results are due any day now.
It's interesting to see the different patterns. USA companies seem to prefer quarterly dividends. I have Finnish and Swedish listed shares and they both pay a single dividend annually. My UK holdings mostly pay twice yearly. Offhand, I think only Unilever pays quarterly and they moved that way around 2009.
Best wishes
Mark.
monabri wrote:ADrunkenMarcus wrote:Dod101 wrote:As I think I said earlier they appear to have settled in to two dividend payments per year.
The same with Barclays. They used to be twice yearly, then they resumed in 2009 on a quarterly basis and reverted to twice a year in the Staley years. I believe Lloyds announced a move to quarterlies in 2020 but then it became irrelevant as they suspended. I assume their results are due any day now.
It's interesting to see the different patterns. USA companies seem to prefer quarterly dividends. I have Finnish and Swedish listed shares and they both pay a single dividend annually. My UK holdings mostly pay twice yearly. Offhand, I think only Unilever pays quarterly and they moved that way around 2009.
Best wishes
Mark.
Quarterly payers , not forgetting Shell,BP,IMB, BATS and GSK ( going forward with GSK?).
ADrunkenMarcus wrote:I believe Lloyds announced a move to quarterlies in 2020 but then it became irrelevant as they suspended. I assume their results are due any day now.
Mark.
Noel Quinn, Group Chief Executive, said:
“I’m encouraged by our start to the year. Our strategy is on track, with organic growth and good momentum across most parts of the
Group. While profits were down on last year’s first quarter due to market impacts on Wealth revenue and a more normalised level of ECL,
higher lending across all businesses and regions, and good business growth in personal banking, insurance and trade finance bode well
for future quarters. We have further reduced costs while maintaining high levels of technology investment, and remain on track to
achieve our cost and RWA reduction targets for 2022. Although the economic outlook remains uncertain, the continued upward path of
interest rates since our full year results has further strengthened our confidence in delivering a double-digit return on average tangible
equity in 2023.
The Russia-Ukraine war continues to have devastating consequences both within Ukraine and beyond. Our thoughts are with the many
thousands who have lost their lives, their families and the many more whose lives will never be the same. We are supporting our
colleagues in the region while implementing the sanctions put in place by the UK and other governments. HSBC Russia is not accepting
new business or customers and is consequently on a declining trend. The vast majority of our business in Russia serves multinational
corporate clients headquartered in other countries, and as a global bank, HSBC has a responsibility to help them manage these
challenging circumstances."
Financial performance (vs. 1Q21)
• Reported profit after tax down $1.1bn to $3.4bn and reported profit before tax down $1.6bn to $4.2bn. The decrease
reflected a net charge for expected credit losses and other credit impairment charges (‘ECL’) in 1Q22, compared with a net release in
1Q21, as well as lower revenue. Adjusted profit before tax down $1.6bn to $4.7bn.
• All regions continued to be profitable. In 1Q22, our Asia operations contributed $2.8bn to Group reported profit before tax, and
HSBC UK contributed $1.2bn.
• Reported revenue down 4% to $12.5bn, primarily in Wealth and Personal Banking (‘WPB’), reflecting unfavourable market
impacts in life insurance manufacturing and lower investment distribution revenue in Hong Kong, as well as lower Global Debt
Markets and Principal Investments revenue in Global Banking and Markets (‘GBM‘). Net interest income increased in all global
businesses from balance sheet growth and interest rate rises. Adjusted revenue down 3% to $12.5bn.
• Net interest margin (‘NIM’) of 1.26% increased by 5 basis points (‘bps‘) compared with 1Q21, and by 7bps compared with 4Q21.
• Reported ECL were a charge of $0.6bn, compared with a release of $0.4bn in 1Q21. Increased ECL primarily reflected the
direct and broader economic impacts of the Russia-Ukraine war and inflationary pressures on the forward economic outlook, although
were in part mitigated by the release of substantially all of the remaining Covid-19 reserves. Stage 3 charges of $0.4bn remain low
relative to historical experience.
• Reported operating expenses down 3%, and adjusted operating expenses down 2%, as continued growth in technology
investment and the effects of higher inflation were more than offset by the impact of our cost-saving initiatives and a lower
performance-related pay accrual due to the expected phasing of our profits for the year.
• Customer lending balances up $9bn in the quarter on a reported basis and $21bn on an adjusted basis, reflecting growth
in mortgage balances of $5.8bn, as well as term and trade lending, notably in Commercial Banking (‘CMB‘).
• Common equity tier 1 (‘CET1’) capital ratio of 14.1%, down 1.7 percentage points from 4Q21, as a result of an $11.2bn
reduction in CET1 capital and a $24.0bn increase in risk-weighted assets (‘RWAs‘). The reduction was driven by a 0.8 percentage point
impact from regulatory changes that took effect in 1Q22, and a 0.4 percentage point impact from a $3.1bn valuation loss in equity
from financial instruments as yield curves steepened. These instruments are held as economic hedges of net interest income. The
reduction also included the share buy-back of up to $1bn announced at our full year 2021 results.
• The share buy-back of up to $2bn announced at our third quarter 2021 results concluded on 20 April 2022, resulting in
$2.0bn being purchased and cancelled. We intend to initiate the further share buy-back of up to $1bn, announced at our full year 2021
results, after our annual general meeting on 29 April 2022.
And later;
Dividends;
• On 22 February 2022, the Directors approved a second interim dividend for 2021 of $0.18 per ordinary share to be paid on 28 April
2022 in cash. The sterling and Hong Kong dollar amounts of approximately £0.138188 and HK$1.411736 were calculated using the
forward exchange rates quoted by HSBC Bank plc in London at or about 11.00am on 19 April 2022. The Group has reviewed whether
it will revert to paying quarterly dividends and is currently not intending to pay quarterly dividends during 2022. The Group will
continue to review whether to revert to paying quarterly dividends in future years, and a further update will be given at or ahead of the
2022 annual results announcement in February 2023.
Dod101 wrote:These do not look very inspiring. See what the market thinks shortly.
Dod
idpickering wrote:Dod101 wrote:These do not look very inspiring. See what the market thinks shortly.
Dod
I agree. I mentioned elsewhere that I might buy into this firm, but maybe not?
HSBA down 2% as I type. But one has to think longer term than just today of course. But let’s not stray off topic for this board.
Ian.
HSBC’s largest shareholder, Chinese insurance company Ping An, has called for the UK bank to break itself up, according to people familiar with the matter.
The rupture with the biggest insurer in China marks a further escalation of HSBC’s geopolitical woes, with the bank squeezed between China and the west.
Ping An has set out its plan for a break-up to HSBC’s board, led by chair Mark Tucker and chief executive Noel Quinn, according to people familiar with the matter.
The intensifying criticism will pile pressure on management, which has been struggling to reverse share price declines in recent years and navigate the increased geopolitical tension between China, where it makes most of its profits, and the west.
Ping An has argued that an independent Asia business listed in Hong Kong would have higher profitability, lower capital requirements and greater local management control and autonomy to make decisions.
A demerger would also give shareholders more choice on what parts of the sprawling lender — which has 40m customers, more than 200,000 staff and operations in 64 countries — they want to own, the insurer has said.
In the discussions with the board, it has used the break-up of fellow insurer Prudential as a model, claiming its three independent units — Jackson National, Prudential Plc and M&G — are now worth $5bn more separately than when as part of one group in 2019.
In 2015, HSBC conducted a review of whether London was the right place for its headquarters. It concluded it was and has not revisited the decision since.
Tucker has rebuffed calls for a break-up of the group, saying at the bank’s annual meeting in London on Friday that he is happy with the group’s strategy and performance.
Ping An owns 9.2 per cent of HSBC, according to two people familiar with the matter. The latest publicly disclosed shareholdings show Ping An at 8 per cent, just behind BlackRock at 8.3 per cent.
Ping An declined to comment. HSBC did not immediately provide a comment.
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