HSBC reports fourth-quarter pre-tax profit of $5.2 billion, beating estimates

HSBC on Tuesday reported fourth-quarter earnings for 2022 that beat analyst expectations.

The bank’s reported profit before tax for the three months ended in December was $5.2 billion, 108% higher than $2.5 billion a year ago and better than the $4.97 billion expected in estimates compiled by the bank. HSBC said its fourth-quarter results reflect strong reported revenue growth and lower reported operating expenses.

For the full year, reported revenue was $51.73 billion, up from $49.55 billion in 2021. The bank’s reported profit before tax for 2022 fell to $17.53 billion from $18.91 billion a year ago.

HSBC, Europe’s largest bank by assets, said higher global interest rates support the firm’s confidence in achieving its target of at least 12% return on average tangible equity in 2023.

“We completed the first phase of our transformation and our international connectivity is now underpinned by good, broad-based profit generation around the world,” Noel Quinn, group chief executive said in the release.

“We are on track to deliver higher returns in 2023 and have built a platform for further value creation,” he said.

Banks globally have seen strong net interest income as central banks around the world raised rates to tame inflation. HSBC said it expects net interest income of at least $36 billion in 2023.

Hong Kong-listed shares of HSBC were about 1% lower before the release, but were nearly 2% lower in the afternoon.

Here are other highlights of the bank’s financial report card:

• Reported expected credit losses of $3.6 billion in 2022 reflect increased economic uncertainty, rising interest rates and developments for China’s property sector.
• Net interest margin, a measure of lending profitability, rose 28 basis points to 1.48% in 2022, reflecting interest rate rises.
• HSBC’s board approved a second interim dividend of 23 cents per share, making a total for 2022 of 32 cents per share.

Mark Tucker, HSBC’s group chairman, said the global economy still faces many macroeconomic headwinds.

“The pandemic, high inflation and interest rates, and the Russia-Ukraine war all have implications for the global economy, including volatility in markets, supply chain disruption, pressure on small and medium-sized business and squeezes on the cost of living,” he said in a statement.

“Different economies also now face different challenges and have different opportunities in 2023,” he said.

This is a breaking news story, please check later for updates.