HSBC Profit Doubles, Plans For More Share Buyback

HSBC on Tuesday announced bumper 2021 profits and plans to repurchase shares worth up to US$1 billion as the Asia-focused bank continues its recovery from the coronavirus pandemic and major restructuring.

The lender endured a tumultuous 2020 like the rest of the banking sector as the virus outbreak rocked the economy just as it embarked on a restructuring programme to slash 35,000 jobs to refocus on its most profitable areas in Asia and the Middle East.

The London-headquartered bank on Tuesday reported pre-tax profit of US$18.9 billion in 2021, up US$10.1 billion on the year before, helped by lower bad loans and operating expenses.

Profit after tax was up US$8.6 billion to US$14.7 billion. Fourth quarter profit before tax rose US$1.3 billion to US$2.7 billion.

In a boon for investors, the bank also announced plans for a US$1 billion share buyback, adding to a US$2 billion buyback announced late last year.

"We have good momentum coming into 2022 and are confident that we can continue to execute against our strategy," Chief Executive Officer Noel Quinn said in the statement.

"We also remain cognisant of the potential impact that further Covid-19-related uncertainty and continued inflation might have on us and our clients."

HSBC makes 90 percent of its profit in Asia, with China and Hong Kong the major drivers of growth.

Early last year it published a new strategy laying out plans to redouble its attempt to seize more of the region's market.

HSBC wants to seek out more fee-based income, especially via wealth management for Asia's increasingly affluent.

It is also hopeful of a significant boost to income thanks to the prospect of higher interest rates to fight surging global inflation. (AFP)