HSBC chief Quinn says bank’s lows ‘are behind us’
HONG KONG: HSBC is emerging from its coronavirus and restructuring troubles to become more reliably profitable, boss Noel Quinn said on Monday, as he announced the start of a $2 billion share buyback.
The Asia-reliant lender had a tumultuous 2020, as its fortunes took a hammering from both the coronavirus and simmering geopolitical tensions.
Quinn has since overseen a dramatic restructuring, slashing the bank’s workforce by around 35,000 and refocusing on its most profitable areas in Asia and the Middle East, a tactic, he said, was now paying dividends.
“While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us,” Quinn wrote in a note attached to the bank’s third quarter results.
“This confidence, together with our strong capital position, enables us to announce a share buyback of up to $2 billion, which we expect to commence shortly,” he added.
The results statement showed HSBC’s pre-tax profit more than doubled on-year in the third quarter to $5.4 billion. The profit-after-tax came in at $4.2 billion, up from $2.2 billion the same period last year.
HSBC makes 90 per cent of its profit in Asia, with China and Hong Kong the major drivers of growth.
In February, it published a new strategy laying out plans to redouble its attempt to seize more of the Asian market.
Weighed down by low interest rates, it is planning to seek out more fee-based income, especially wealth management for Asia’s increasingly affluent.
Earlier this year, the bank sold its 90 branches in the United States and completed a long-running disposal of its unprofitable French retail business.
While all banks were hit hard by the coronavirus pandemic, HSBC also had to deal with another added wrinkle, geopolitical tensions.
HSBCs historical and present- day connections to China are both its major selling point and a source of vulnerability.
It has found itself more at risk than most of the global banks to the increasingly frayed relationship between China and the western powers, especially after Beijing imposed a draconian security law on Hong Kong last year.
HSBC endorsed the security law, a move that led to criticism from the lawmakers in Britain and the United States, and has frozen the accounts of some Hong Kong democracy activists at the request of the local authorities.
At the same time, the lender has found itself called out by Chinese state media for providing information that helped lead to the arrest in Canada of a top Huawei executive.
HSBC says it has to obey the laws in each jurisdiction it operates in.
Dollar to PKR: Today US Dollar rate in Pakistan on November 28, 2021
KARACHI: The average customer rates of buying and selling of US dollar...
Currency rates in Pakistan today on, 28th November 2021
Karachi: Latest Currency Rates in Pakistan today on 28th November 2021, Check updated...
Gold Rates: Gold Rate in Pakistan today on, 28th November 2021
Karachi: Gold Rate in Pakistan today on November 28, 2021 stands at Rs117,300...
WTO postpones MC12 due to new COVID-19 variant surge, travel restrictions
GENEVA -- The World Trade Organization (WTO) announced early Saturday morning the...
U.S. dollar falls amid rising risk aversion
NEW YORK -- The U.S. dollar recorded a deep decrease in late...