HSBC on Monday said it would reinstate dividends after first-half profits more than doubled as an ongoing restructuring and pivot to Asia continues to pay off.
Reported profit before tax rose $6.5bn to $10.8bn. The bank said it pay an interim dividend of 7 cents a share after UK regulators last year ordered banks to suspend payouts amid the coronavirus pandemic.
Second-quarter profit doubled from a year earlier to $5.56bn, beating analyst forecasts of $4.73bn. The bank said it expects to meet its target of paying out 40 -55% of earnings in dividends this year.
In April, HSBC began to release credit provisions it had piled up in the early stages of the Covid-19 outbreak, saying the outlook for UK borrowers in particular was improving after more than a year of pandemic turmoil.
“We were profitable in every region in the first half of the year, supported by the release of expected credit loss provisions. Our lending pipeline began to translate into business growth in the second quarter and we further strengthened that pipeline during the half,” said chief executive Noel Quinn.
The bank released $719m in reserves set aside for bad loans, including $435m in the first quarter. HSBC last year earmarked $8.8bn in credit loss provisions as the pandemic hammered the global economy.
Revenue fell 4% to $12.6bn in the second quarter, while net interest income declined 4.6% to $6.58bn.
Net interest margin, the difference between interest rates on loans and savings, slipped 13 basis points to 1.2% year on year.
