HSBC has announced the resumption of dividend payments after the bank reported better-than-expected earnings for 2020.
The London-based bank, which generates most of its revenue in Asia, said its reported profit before tax for 2020 fell to $8.78 billion, down 34% from the previous year. The figure is in excess of the $8.33 billion predicted by analysts the bank had polled. Reported revenue fell by 10% to $50.43 billion.
HSBC had cancelled its final 2019 dividend payment at the request of UK regulators, and followed this up with the suspension of an interim payout last year, moves which angered many investors.
The report was released whilst Hong Kong markets were on a lunch break. When trading resumed the bank’s Hong Kong-listed shares jumped by 5%.
The bank also announced it would invest US$6 billion over the next five years in its wealth management and wholesale banking operations in Asia. This is part of an overall strategy to place greater emphasis on the region whilst cutting back from other markets.
HSBC themselves have already confirmed they are in negotiations to sell its French retail banking operations, whilst Reuters reported on Monday that the bank is also seeking an exit from the U.S. retail banking sector.
HSBC is the first of Hong Kong’s major lenders to report its 2020 results, with Standard Chartered and Bank of East Asia expected to issue their results in the coming week. Bank of China (Hong Kong) is expected to report its 2020 results on March 30th.