HSBC profit more than doubled from $2.5bn to $5.2bn in the fourth quarter 2022 as a strong rebound in their Asian business helped support earnings.
For the 2022 full year, profit before tax dipped $1.4bn to $17.5bn with a $2.4bn impairment of their French banking business responsible for the loss.
Despite stringent economic restrictions in China due to coronavirus, a strong end to the year helped HSBC’s Asian profit before tax grow to $13.7bn in 2022 from $12.2bn a year prior. Their European unit recorded a loss before tax of $415m.
The company noted more favourable conditions in the Chinese property market which bodes well for HSBC’s earning growth next year.
Having earned $32.6bn Net Interest Income in 2022, the bank said they expect generate $36bn in 2023. This upbeat assertion clearly won the confidence of investors and HSBC shares rose 2.5% to 636p in early trade on Tuesday.
HSBC said they would pay a 23 cent final dividend to total 32 cent for the 2022 full year. The company also alluded to the possibility of a special dividend once the sale of HSBC Canada is completed.
“The numbers themselves are strong compared to market expectations but the market was hoping for a little more good news in the outlook statement, so the shares are down by around 1% this morning,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.
“The business is performing well, but much depends on the group maintaining robust cost controls. That means more branch closures in the UK this year, with another 130 set to close. But for shareholders, that intention to pay out half of earnings suggests an ongoing yield from HSBC shares of perhaps as much as 7% this year and next, with that extra USD21c special dividend on top.
“HSBC represents one of the most direct routes of investing into the reopening of the Chinese economy. Whilst that remains on track, we would expect to see continuing encouraging trading news coming from the bank.”