HSBC profit before tax is $30.3b in 2023

But the bank also had a $3b impairment charge related to the Bank of Communications.

HSBC’s profit before tax rose to $30.3b in 2023, driven partly by a $2.5 gain from the sale of its French retail banking operations, and a $1.6b provisional gain from the acquisition of Silicon Valley Bank UK in 2023.

Profit after tax is $24.6b, an increase of $8.3b.

With this, HSBC will be able to give its highest full-year dividend since 2008, three share buybacks totalling $7bm and a further share buy-back of up to $2b, group chief executive Noel Quinn said in a statement.

“This reflected four years of hard work and the strength of our balance sheet in a higher interest rate environment,” Quinn said, commenting on the results.

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However, the bank recognized an impairment charge of $3b in 2023 relatting to the investment of an associate, Bank of Communications (BoCom), following a reassessment of its accounting value in-use.

HSBC’s revenue rose $15.4b or 30% to $66.1b in 2023. Net interest income grew $5.4b due to the high interest rate environment, whilst the non-interest income increased by $10b due to a rise in trading and fair value income.

HSBC’s net interest margin (NIM) of 1.66% is 24 basis points higher than a year ago, again due to higher interest rates. 

Expected credit losses and other credit impairment charges (ECL) were $3.4b, a reduction of $0.1b. The net charge in 2023 primarily comprised stage 3 charges, notably related to mainland China commercial real estate sector exposures, HSBC said.

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Operating expenses fell by $0.6bn or 2% to $32.1b, mainly due to the non-recurrence of restructuring and other related costs following the completion of our cost to achieve programme at the end of 2022. This more than offset higher technology costs, inflationary pressures and an increase in performance-related pay, thet bank said.

For 2024, HSBC expects net interest income to be at least $41b.