HSBC Holdings PLC took a charge relating to its Chinese commercial real-estate exposure and warned of a weaker performance in its wealth business in Asia, blemishing results for last quarter that saw the lender boost plans to return billions of dollars to investors.
The London-based bank is to initiate a share buyback of as much as US$1 billion, on top of an earlier US$2 billion program, it said in an earnings statement yesterday.
The lender posted a 79 percent increase in adjusted pretax profit to about US$4 billion last quarter, roughly in line with company-compiled estimates.
Photo: Reuters
The bank said it will pay a second interim dividend of US$0.18 per share.
The US$450 million impairment charge — largely relating to offshore China commercial real-estate exposures booked on its Hong Kong balance sheets — was the result of local policy measures that had led to an increase in “refinancing risk and liquidity pressures,” HSBC chief executive officer Noel Quinn said in a telephone interview.
“Those market conditions have improved, to some extent, in the early part of 2022,” Quinn said.
HSBC chief financial officer Ewen Stevenson said that the conditions were not a one-off, but were “eminently manageable.”
Separately, Quinn said in an earnings statement that the lender carries “good business momentum” into this year, but it expects a weaker wealth performance in Asia this quarter.
HSBC follows other global banks in boosting shareholder returns as rising interest rates buoy lending income.
At the same time, the economic outlook is being clouded by factors including geopolitical tensions, inflation and effects of the COVID-19 pandemic, including in HSBC’s key market of Hong Kong.
A year ago, HSBC unveiled a strategic refresh with its pivot to Asia. The strategy is focused on managing more of the wealth of Asia’s growing ranks of millionaires and billionaires, as well as the region’s mass affluent.
The plan involves an investment of US$6 billion across Asia, targeting wealth management, commercial banking and markets.
The past years have been dominated by repeated restructurings that have included cutting 35,000 jobs, relocation of senior executives from London to Hong Kong, and most recently coping with the fallout from the pandemic.
However, HSBC said Hong Kong’s curbs on travel and social interaction are hurting the economy, and might affect the ability to hire and keep staff in the Asian financial hub.
“The evolving COVID-19 restrictions in Hong Kong, including travel, public gathering and social distancing restrictions, are impacting the Hong Kong economy, and may affect the ability to attract and retain staff,” the bank said.
HSBC’s comments came after Standard Chartered PLC CEO Bill Winters last week said that the territory’s travel curbs could in the long run hurt its status as a financial hub compared with other regional centers.
Additional reporting by Reuters
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS