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HSBC flags bigger investments in Asia after profit beat

HONG KONG (BLOOMBERG) -HSBC Holdings' earnings beat estimates in the fourth quarter as the lender kept costs in check and signaled bigger investments to drive its pivot to faster-growing Asian markets.
Weighed down by loan losses, adjusted pretax profit slid 50 per cent to US$2.2 billion (S$2.9 billion) in the period, compared with a US$1.80 billion estimate, the London-based bank said on Tuesday (Feb 23). HSBC will resume paying a dividend of US$0.15 after British regulators relaxed a ban intended to preserve capital last year after the virus outbreak.
"We have had a good start to 2021, and I am cautiously optimistic for the year ahead," chief executive officer Noel Quinn said in a statement.
HSBC is pushing through one of the banking industry's most radical responses to the pandemic in a strategic reset that comes as chairman Mark Tucker said last month that "the world had changed." Europe's largest bank is shifting billions of dollars to beef up operations across Asia, seeking to become a market leader in wealth management by targeting a rapidly expanding affluent population in the region.
The bank outlined plans to invest about US$6 billion in Asia, targeting wealth, commercial banking and markets to drive "double-digit growth in profit." It singled out markets in South-east Asia such as Singapore, as well as China and Hong Kong.
Expected credit losses last year hit US$8.8 billion, as expected at the low end of a previously announced range of US$8 billion to US$13 billion. It now expects them to be materially lower this year.
The bank stuck to a target of getting its cost base down to US$31 billion or less in 2022 as well as a US$100 billion reduction in gross risk-weighted assets. It doesn't expect to reach a return on average tangible equity target of between 10 per cent and 12 per cent in 2022, but will now target a return of greater than or equal to 10 per cent in the medium term.
More on this topic Related Story HSBC mulls over moving top executives to Hong Kong or Singapore to strengthen Asia push Related Story HSBC grooms top bankers for make-or-break push into China

This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform.

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