London-headquartered HSBC recorded lower profits in the first quarter of 2024 as higher expenses and expected credit losses offset a revenue uptick.
HSBC’s pre-tax profit for the first quarter of 2024 fell 1.8 percent to $12.7 billion, according to the bank’s financial results.
Revenue increased 3 percent to $20.8 billion, driven by a $4.8 billion gain from the disposal of the Canada banking business which was partly offset by a $1.1 billion impairment due to the classification of the Argentina business to being held for sale. Revenue growth also reflected higher customer activity in wealth and personal banking (WPB) as well as equities and securities financing in global banking and markets.
Higher Expenses, ECL
Operating expenses grew 7 percent to $8.2 billion due to continued investment in technology, inflation and higher performance-related pay accrual. Expected credit losses also increased by approximately $300 million to $700 million, primarily attributable to stage 3 charges from the WPB and wholesale businesses.
HSBC’s board approved a first interim dividend of $0.1 per share alongside a special dividend of $0.21 per share, payable in June 2024, following the completed sale of the Canada banking business. The bank also intends to initiate a $3 billion share buyback after the annual general meeting in May following a $2 billion buyback program in 2023.
