HSBC profit after tax rose to $9.2b in H1

The board has approved an interim dividend of $0.09 per ordinary share for the period.

HSBC’s profit after tax rose to US$9.2b in the first half of 2022, or around US$800m higher than the first six months of 2021, the bank said in its latest financial announcement. 

The rise was partly thanks to a US$1.8b gain, which HSBC said was due to “the recognition of a deferred tax asset from historical losses, as a result of improved profit forecasts for the UK tax group, which has accelerated the expected utilisation of these losses,” the bank said in a statement.

HSBC’s board has approved an interim dividend of US$0.09 per ordinary share for H1 2022, to be paid in cash.

“Our first-half performance reflects the continued impact of our strategy, with gathering revenue momentum and tight cost control,” said Noel Quinn, group chief executive of HSBC. “ The progress that we’ve made growing and transforming HSBC means we are in a strong position as we enter the current rates cycle.”

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The bank’s reported operating expenses decreased by 4% due to foreign currency translation impacts and thet bank’s cost-saving initiatives. 

Quinn added that the bank is confident of achieving a return on tangible equity of at least 12% from 2023 onwards–which, if it happens, would represent HSBC’s best returns in a decade.

Following the promising profit performance in the first half of 2022, HSBC has released a specific dividend payout ratio guidance of around 50% for 2023 and 2024. 

The bank estimates that net interest income will total at least US$31b for 2022, and rise to at least US$37b for 2023.

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“We now aim to deliver 2023 adjusted cost growth of around 2%, compared with 20221, and intend to maintain strict cost discipline thereafter,” HSBC said in a statement. 

HSBC also aims to revert to paying quarterly dividends in 2023, although the bank expects the quarterly dividend for the first three quarters to initially be reinstated at a lower level than the historical quarterly dividend of $0.10 per share that was paid last 2019.