SINGAPORE/LONDON, Feb 21 (Reuters) – HSBC Holdings (HSBA.L) on Tuesday reported quarterly profit nearly doubled, beating estimates, as rising interest rates swelled net interest income, prompting Europe’s largest bank to offer long-suffering investors a dividend and buyback bonanza.
The London-headquartered bank said it intended to pay a special dividend of $0.21 per share, as a priority use of the proceeds from the $10 billion sale of its Canada business, once that disposal is complete late this year.
“With the delivery of higher returns, we will have increased distribution capacity, and we will also consider a special dividend once the sale of HSBC Canada is completed,” Group Chief Executive Noel Quinn said in a statement.
The lender reported pretax earnings of $5.2 billion for the fourth quarter, up from $2.7 billion a year earlier and ahead of the $4.96 billion average estimate of analysts compiled by the bank.
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The Asia-focused bank, which counts Hong Kong as its biggest market, said annual expected credit losses rose to $3.6 billion, more than the $3.2 billion analysts had estimated, due to rising inflation pressuring borrowers and lingering problems in China’s property market.
Despite the fourth-quarter surge, annual profit fell to $17.5 billion from $18.9 billion for 2021, due to an impairment of $2.4 billion related to the sale of its retail banking operations in France.
That matched the $17.5 billion average estimate of 22 analysts compiled by the bank.
Reporting by Anshuman Daga and Lawrence White; Editing by Kenneth Maxwell
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