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August 3, 2021

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As profits rise, HSBC to restore dividends

Source: AFP | 00:00 UTC+8 August 3, 2021 | Print Edition

HSBC yesterday said it would resume paying dividends to shareholders after first-half profits more than doubled as an ongoing restructuring and pivot to Asia continues to pay off.

The results beat analyst estimates and are a shot in the arm for the Asia-reliant lender after a tumultuous 2020 saw its fortunes take a hammering from the coronavirus and geopolitical tensions.

Reported profit before tax rose US$6.5 billion to US$10.8 billion while reported profit after tax increased US$5.3 billion to US$8.4 billion.

The bank also announced an interim dividend of seven cents per ordinary share for the first half of the year.

British regulators last year ordered banks to suspend payouts as the coronavirus tore through the global economy, to shore up liquidity. But last month they relaxed those “temporary guardrail” measures.

HSBC is one of the biggest dividend payers in European banking, and after a year of restrictions is expected to set aside more than any of its rivals this year and next, according to estimates collated by Bloomberg.

“We definitely feel more confident,” chief financial officer Ewen Stevenson said. ”We will keep buybacks under review,” together with dividends.

Like all banking giants HSBC was battered by the coronavirus last year, with a 30 percent plunge in profit.

Under CEO Noel Quinn, it has embarked on a dramatic restructuring, rolling out plans to cut jobs by about 35,000 to drive down costs and to refocus on its most profitable areas: Asia and the Middle East.

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