Europe’s largest bank by assets reported earnings for 2020, and the results came in higher-than-expected.
For the past year, the bank announced a profit before tax of $8.78 billion, which topped the $8.33 billion consensus. However, compared to 2019 figures, the numbers fell 34%. Also, revenue for 2020 was 10% lower than what it reported in 2019, the figures coming in at $50.43 billion.
For the future, HSBC announced its plan of paying 15 cents per share interim dividends – the first payout since Q3 2019. Starting in 2022, HSBC considers a target payout ratio of 40%-55% of reported EPS. “We will consider share buy-backs, over time and not in the near term, where no immediate opportunity for capital redeployment exists. We will also no longer offer a scrip dividend option, and will pay dividends entirely in cash,” stated Noel Quinn, the bank’s CEO.
Moreover, HSBC is reconsidering its business strategy, as it announced multiple changes to senior executive roles, and it would focus on Asia – which is responsible for most of its revenues.
Following the news, during the Hong Kong trading hours, HSBC stock price added 5%.