HSBC posted fourth-quarter results for 2022 on Tuesday that exceeded analyst projections.
The bank’s profit before tax for the three months ending in December was $5.2 billion, 108% more than the $2.5 billion recorded a year earlier and better than the $4.97 billion projected in bank predictions. According to HSBC, the fourth-quarter results show robust reported revenue growth and decreased reported operational expenditures.
Revenue was recorded at $51.73 billion for the entire year, up from $49.55 billion in 2021. The bank’s pre-tax earnings for 2022 decreased to $17.53 billion from $18.91 billion the previous year. It stated that the reported pre-tax profit for 2022 included a $2.4 billion impairment related to the expected sale of its retail banking assets in France.
HSBC, Europe’s largest bank by assets, said higher global interest rates support the firm’s confidence in achieving its target of at least 12% return on average tangible equity in 2023.
“We accomplished the first phase of our transformation, and our worldwide connectivity is now anchored by solid, broad-based profit generating throughout the world,” said Noel Quinn, group CEO, in a statement.
“We are on target to achieve better returns in 2023 and have established a foundation for future wealth development,” he added.
Banks throughout the world have witnessed excellent net interest revenue as central banks around the world hiked interest rates to combat inflation. In 2023, HSBC anticipates net interest income of at least $36 billion.
HSBC’s Hong Kong-listed shares were around 1% down before the announcement, but about 2% lower in the afternoon.
Some highlights from the bank’s financial report card include:
- Expected loan losses of $3.6 billion in 2022 reflect growing economic uncertainty, rising interest rates, and changes in China’s property industry.
- Net interest margin, a measure of lending profitability, increased 28 basis points to 1.48% in 2022 as interest rates rose.
- The board of directors of HSBC authorized a second interim dividend of 23 cents per share, bringing the total for 2022 to 32 cents per share.