Despite higher revenues and lower costs, HSBC reported a decrease in pre-tax profits for 2022 due to a significant boost in credit-related charges.
HSBC reported a pre-tax profit of $17.5 billion in 2022, according to its annual results, down $1.4 billion or 7.4 percent compared to 2021.
Revenues rose 4 percent to $51.7 billion, driven by strong growth in interest income, while expenses fell 4 percent to $33.3 billion due to currency differences and ongoing cost controls. The bank posted notably strong results in the fourth quarter with pre-tax profits surging by about 93 percent year-on-year to $5.2 billion.
Credit Charges
Despite improved performance in revenues and costs, HSBC registered expected credit losses and other credit impairment charges totalling $3.6 billion, up from a net release of around $900 million in 2021.
These charges reflect «increased economic uncertainty, inflation, rising interest rates and supply chain risks, as well as the ongoing developments in mainland China‘s commercial real estate sector», which were in part offset by most of the bank’s remaining Covid-linked reserves.
Special Dividend
For investors, HSBC’s board approved a second interim dividend of $0.23 per share, bringing the bank’s annual dividend for 2022 to $0.32 per share.
HSBC noted that its growth and transformation initiatives, coupled with higher interest rates, make it confident in achieving its return on average tangible equity (RoTE) target of at least 12 percent for 2023 onwards.
«2022 was another good year for HSBC. We are on track to deliver higher returns in 2023 and have built a platform for further value creation. With the delivery of higher returns, we will have increased distribution capacity, and we will also consider a special dividend once the sale of HSBC Canada is completed,» said HSBC group CEO Noel Quinn.
