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Europe’s largest lender HSBC saw its pre-tax profit more than double in 2021, supported by improved economic outlook and gains made across various markets.
Total profit before tax for the year reached $18.9 billion, up by 115 percent from $8.8 billion in 2020, the bank reported on Tuesday, citing that its business last year was profitable in all the regions it operated in.
The bank’s operations in Asia alone contributed $12.2 billion to the overall earnings, while other markets demonstrated “material recovery,” HSBC said.
“We made good progress against our strategy in 2021, which contributed to a strong financial performance that was supported by the global economic recovery,” said Noel Quinn, HSBC Group’s chief executive.
“All of our regions were profitable, and we saw growth in the fourth quarter of 2021 in many of our business lines.”
The lender saw operating expenses fall despite inflationary pressures, thanks to cost-saving initiatives. Customer lending balances were up $8 billion, driven by growth in mortgage balances, mainly in the United Kingdom and Hong Kong.
Net new invested assets in HSBC’s wealth business expanded by 21 percent globally and 138 percent in Asia.
However, reported revenue fell and this was mainly due to the lower interest rate environment and a strong performance in 2020, especially in the markets and securities services space.
Revenue from the bank’s wealth and trade businesses, on the other hand, increased, as did its trade lending, which is now higher than the levels recorded prior to the COVID-19 pandemic.
The bank pegged the full-year 2021 dividends per share at $0.25, compared to $0.15 in the previous year.
It also noted that it intends to initiate an incremental share buy-back of up to $1 billion, which will start after the $2 billion buy-back, which is already in progress, has concluded.
The value of sustainable finance and investment that the bank provided and facilitated since January 2020 reached $127 billion.
Risk-weighted asset reductions reached a cumulative $104 billion. The bank now expects to exceed its target of $110 billion by the end of the year.
Looking forward, HSBC said it will “carry good business momentum” into 2022 in most areas and that it expects mid-single-digit lending growth over the year.
“Our efforts to date pave the way for us to execute on the growth opportunities across our businesses and leverage our international network,” the lender said.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
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