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HSBC appears to be handling the complexities being presented by the Asian market quite well as it confirmed it has earmarked the sum of $900 million in cash to help cushion any possible COVID-19 pandemic bad loan spikes.
The public stock of British multinational investment bank and financial services holding company HSBC Holdings plc (LON: HSBA) is down 0.29% in London despite the impressive annual financial performance report shared by the bank. As contained in the highlights shared by the firm, its profit before tax came in at $18.9 billion, up from the $8.8 billion recorded in the 2020 Financial Year.
The bank provided or facilitated a total of $83 billion in sustainable finance and investment as a related investment provided and facilitated since 1 January 2020 topped $127 billion. The company looks towards growing this investment to a range of $750 billion to $1 trillion by 2030. Additionally, HSBC unveiled it has earmarked 25 cents per share dividends for its shareholders, a figure that is up from 15 cents in the previous financial year. Over the coming years, HSBC hopes to initiate a $1 billion share buyback after the up-to-$2bn buyback already in progress has concluded.
“We made good progress against our strategy in 2021, which contributed to a strong financial performance that was supported by the global economic recovery,” said Noel Quinn, HSBC Group Chief Executive, “All of our regions were profitable and we saw growth in the fourth quarter of 2021 in many of our business lines. We have good momentum coming into 2022 and are confident that we can continue to execute against our strategy. We also remain cognizant of the potential impact that further Covid-19-related uncertainty and continued inflation might have on us and our clients.”
In general, rebounding from the coronavirus pandemic has helped HSBC improve its numbers across the board. The company also reported an adjusted cost of $32.1 billion which is relatively lower than the $32.4 billion recorded in 2020 as it focused on a number of cost-effective operational processes.
HSBC Stock and the Asian Market Influence
HSBC is a dominant bank in Hong Kong and Asia as a whole where it realized as much as 65% of the total profit figure quoted. Despite the Hong Kong market helping the bank to rake in a massive return, the likelihood of its Wealth Management business receiving a hit is high due to the outbreak of COVID-19 in the country.
“Given their large Asia footprint, it will be interesting to see if the zero-COVID policy in the region will adversely impact their performance relative to their other more UK-centric London rivals in 2022,” said Sudeepto Mukherjee, head of financial services at consultancy Publicis Sapient.
Thus far, HSBC appears to be handling the complexities being presented by the Asian market quite well as it confirmed it has earmarked the sum of $900 million in cash to help cushion any possible COVID-19 pandemic bad loan spikes.
From the performance report, CEO Quinn is optimistic the bank is on track for a double-digit profit record by the end of 2023, a projection relatively earlier by 12 months.