FX.co ★ HSBC Q1 Pre-tax Profit Drops, Plans Dividends, Up To $3 Bln Share Buyback; Backs FY24 View

HSBC Holdings Plc, a leading British bank, announced a slight drop in its pre-tax profit for the first quarter, reducing it to $12.65 billion from $12.89 billion the previous year. Additionally, the post-tax profit was estimated to be $10.84 billion, a slight decrease from $11.03 billion a year earlier.

Despite the lower profits, per share earnings saw an increase, rising to $0.54 from $0.52 due to a lessened share count.

The recent quarter's results included a significant gain of $4.8 billion after the banking business disposal in Canada was completed. This gain was partially compensated by a $1.1 billion impairment charge, a consequence of the held-for-sale status of the business operations in Argentina.

Also, the prior year's absence of the $2.1 billion reversal indexed to the sale of the retail banking sector in France, coupled with the $1.5 billion gain from the acquisition of the Silicon Valley Bank UK Limited, augmented the decrease in pre-tax profit.

When considering remarkable items and their consequential impacts, the basic earnings per share settled at $0.34, marginally lower than the previous year's $0.36.

Contrarily, net operating income showed a growth tendency, increasing to $20.03 billion from $19.74 billion a year ago. Before adjustments for expected credit losses and other credit impairment charges, net operating income stood at $20.75 billion, slightly higher when compared to the preceding year's $20.17 billion.

Net interest income was recorded as $8.7 billion, showing a decrease by $0.3 billion mainly due to deposit migration changes. Conversely, non-interest income displayed a rise.

Net interest margin depleted by 6 basis points, descending to 1.63 percent.

Furthermore, the board has sanctioned a first interim dividend of $0.10 per share. Given the completion of the bank's business sale in Canada, a special dividend of $0.21 per share has also been approved, payable in June 2024.

The bank also intends to initiate a share buy-back of up to $3 billion to begin shortly after the 2024 annual general meeting.

Looking forward to the financial year 2024, HSBC anticipates banking interest income to be at least $41 billion, slightly lower than the $44.1 billion recorded during the financial year 2023.

In Hong Kong, HSBC shares were trading at HK$65.50, showing a marginal decrease of 0.1 percent.