HSBC to lift dividend

Comment on this story
HsbcBank REUTERS A girl holding a balloon walks past a bank branch of HSBC in St Helier, Jersey.Picture: Reuters

London - HSBC, Europe's largest bank, pledged to increase its dividend as strong growth in Hong Kong and other core Asian markets boosted its capital even though annual profit fell short of expectations.

The bank on Monday said it made a 2012 pretax profit of $20.6 billion, down 6 percent from the previous year and below the average forecast of $22.7 billion from 28 analysts polled by Reuters.

Profits were hurt by a $5.2 billion loss on the value of its own debt.

HSBC, already one of the highest dividend payers among Britain's blue-chip companies, said it plans to bump up its first three interim payouts on 2013 earnings by 11 percent to 10 cents per share after strong earnings in Asia and the sale or closure of scores of businesses boosted its capital reserves.

HSBC's shares were down 2.2 percent at 712 pence in early trade, lagging the benchmark Stoxx Europe 600 Banks Index, which was 0.93 percent weaker.

HSBC's stock has risen nearly 30 percent over the past 12 months, outperforming the benchmark's 9 percent gain in the same period.

HSBC has closed or sold 47 businesses over the past two years to cut costs, boost profits and manage risk and while it is ahead of schedule on squeezing costs, improving profitability has been more difficult due to a weak global economy and higher regulatory costs.

Return on equity, a key measure of profitability, dropped to 8.4 percent from 10.9 percent at the end of 2011, putting it well behind this year's target of 12-15 percent.

On an underlying basis, pretax profit rose 18 percent boosted by a strong performance in its commercial banking operation. - Reuters

sign up

Comment Guidelines

  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

  5. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles. You are only required to verify your email address once to have full access to commenting on articles. For more information please read our comment guidelines