HSBC sees strong performance and more branch closures

The bank saw full year profits dip by 7% due to one-off charges, but the 4th quarter result was almost double that of a year ago. HSBC is continuing to refocus towards Asia, and the key industrial and commercial regions of China in particular. 

The group incurred bad debt costs of $3.6bn, but these were largely offset by the release of provisions taken to recognise the potential impact of Covid upon loans made, now that the pandemic has eased.

Regarding the UK, HSBC said in November that it planned to close 114 more branches, citing a fall in in-person customers since the pandemic.

The bank said it would try to find other jobs for the staff affected but warned that around 100 people would be laid off.

"2022 was another good year for HSBC," chief executive Noel Quinn said. "We are on track to deliver higher returns in 2023," he added.

Steve Clayton, head of equity funds, Hargreaves Lansdown: “The numbers themselves are strong compared to market expectations but the market was hoping for a little more good news in the outlook statement, so the shares are down by around 1% this morning.

“The business is performing well, but much depends on the group maintaining robust cost controls. That means more branch closures in the UK this year, with another 130 set to close. But for shareholders, that intention to pay out half of earnings suggests an ongoing yield from HSBC shares of perhaps as much as 7% this year and next, with that extra USD21c special dividend on top.

“HSBC represents one of the most direct routes of investing into the reopening of the Chinese economy. Whilst that remains on track, we would expect to see continuing encouraging trading news coming from the bank.”