HSBC announces interim earnings for the second and half of the year 2021

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Pedestrians wearing protective masks walk past a logo displayed at an HSBC bank branch in the Central District of Hong Kong.

Rui Liu | Bloomberg | Getty Images

HSBC beat expectations in first-half earnings for 2021, and announced its second dividend since the Covid-19 pandemic as the global economy recovers.

The bank’s pre-tax profit more than doubled from a year ago to $10.84 billion in the January-June period of this year. Analysts’ estimates, compiled by the bank, had indicated $9.45 billion in pre-tax profits during that period.

Meanwhile, revenue fell 4.5% from a year ago to $25.55 billion in the first six months of 2021 — broadly in line with the $25.52 billion analysts had expected.

HSBC shares in Hong Kong jumped more than 3% after the earnings announcement.

HSBC Group Chief Executive Noel Quinn said the brighter economic outlook allowed the bank to begin issuing provisions that were set aside for potential loan losses. This was the “main driver” of improving the bank’s profitability.

“We generated profits in every region in the first half of the year,” Quinn said in a statement accompanying the earnings announcement. “This performance enables us to pay an interim dividend for the first six months of 2021,” he added.

The bank declared an interim dividend of $0.07 per common share.

Here are other highlights from the HSBC earnings report:

The bank issued a net $719 million in reported expected credit losses, thanks to a better economic outlook. Net interest margin, a measure of lending profitability, was 1.21% in the first half of 2021. This is 22 basis points lower than the same period in the previous period. The bank said it is targeting a dividend ratio of 40% to 55% of reported earnings per ordinary share for 2021. .

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