By Greg Wright

Published 21st Feb 2023, 07:27 GMT

Updated 21st Feb 2023, 07:27 GMT

The group’s reported profit before tax fell by 1.4bn US dollars (£1.16 bn) to 17.5 billion dollars (£14.5bn) compared to the year previous. It comes as reported revenue increased by 4 per cent to 51.7bn dollars (£42.9bn), driven in part by strong growth in net interest income across all of the group’s global businesses. Noel Quinn, group chief executive, said the results marked “another good year for HSBC”.

He said: “We completed the first phase of our transformation and our international connectivity is now underpinned by good, broad-based profit generation around the world. This contributed to a strong overall financial performance. We are on track to deliver higher returns in 2023 and have built a platform for further value creation. 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.”

The group added it expects to record a net interest income of at least 36 billion (£29.88bn) for the coming year, based on the current market consensus for global central bank rates.

Banking giant HSBC has recorded a slight drop in pre-tax profits as it released its annual results for 2022.

Commenting on outlook, HSBC said: “The impact of our growth and transformation programmes, as well as higher global interest rates, give us confidence in achieving our return on average tangible equity (‘RoTE‘) target of at least 12 per cent for 2023 onwards. Our revenue outlook remains positive. Based on the current market consensus for global central bank rates, we expect net interest income of at least $36bn in 2023 (on an IFRS 4 basis and retranslated for foreign exchange movements). We intend to update our net interest income guidance at or before our first quarter results.”

The statement added: “Given our current returns trajectory, we are establishing a dividend payout ratio of 50 per cent for 2023 and 2024, excluding material significant items, with consideration of buy-backs brought forward to our first quarter results in May 2023, subject to appropriate capital levels. We also intend to revert to paying quarterly dividends from the first quarter of 2023.”

"Subject to the completion of the sale of our banking business in Canada, the board’s intention is to consider the payment of a special dividend of $0.21 per share as a priority use of the proceeds generated by completion of the transaction.

"A decision in relation to any potential dividend would be made following the completion of the transaction, currently expected in late 2023, with payment following in early 2024. Further details in relation to record date and other relevant information will be published at that time.

“Any remaining additional surplus capital is expected to be allocated towards opportunities for organic growth and investment alongside potential share buy-backs, which would be in addition to any existing share buy-back programme."

HSBC also said it had noted recent favourable policy developments in mainland China’s commercial real estate sector and continued to monitor events closely.

Banking giant HSBC’s profits dip slightly but hopes remain high for 2023