HSBC profits more than double to $10.8bn

Pre-tax profits at HSBC increased by $6.5 billion to $10.8 billion in the first half of 2021.

Last year, profits before tax at the UK-based bank reached just $4.3 billion during the same period.

The British multinational said that all regions had been profitable in the first six months of the year, with HSBC UK Bank reporting pre-tax profits of more than $2.1 billion.

“These are good results that reflect the return of growth in our main markets and marked progress in the execution of our strategy,” said Noel Quinn, group chief executive, HSBC. “We were profitable in every region in the first half of the year, supported by the release of expected credit loss provisions.”

Improved economic forecasts meant that expected credit loss was much lower in the first half compared to last year. In 2020, the bank had a $3.8 billion credit loss provision in the second quarter, compared to just $0.3 billion this year so far.

In response to the improved economic outlook, HSBC plans to move within its target dividend payout ratio range of 40 to 40 to 55 per cent of reported earnings per ordinary share in 2021.

“Our lending pipeline began to translate into business growth in the second quarter and we further strengthened that pipeline during the half,” said Quinn. “This performance enables us to pay an interim dividend for the first six months of 2021.”

The chief exec added that the bank has taken firm steps to define the future of its US and continental Europe businesses and further enhanced its global Wealth capabilities. “We are focused on executing the growth and transformation plans we announced in February,” he said.

But the bank warned that despite continued revenue headwinds, there are emerging signs of unsecured personal lending and commercial lending growth. It said that it expects mid-single-digit lending growth for the year.

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