HSBC beats expectations as profits drop 34% to £6.2 billion

The bank, which is weighed down by loan losses, said in its annual results it will resume paying a dividend of 0.15 dollars (£0.11) per share despite the drop.

Pre-tax profit was down from 13.3bn dollars (£9.4bn) for the same period in 2019, though US financial services firm Jefferies noted that result was 23% better than market expectations.

Meanwhile, the adjusted profit before tax of 12.1bn dollars (£8.6bn) fell 76% on the year before.

The bank reported an adjusted revenue of 50.4bn dollars (£35.8bn), representing a fall of just 8% on 2019’s 54.9bn dollars (£39bn), with shares shooting up 3.3% in early trading in Hong Kong following Tuesday’s announcement.

Group chief executive Noel Quinn said the company’s mandate in 2020 was to “provide stability in a highly unstable environment for our customers, communities and colleagues”.

He added: “I believe we achieved that in spite of the many challenges presented by the Covid-19 pandemic and heightened geopolitical uncertainty.

“Our people delivered an exceptional level of support for our customers in very tough circumstances, while our strong balance sheet and liquidity gave reassurance to those who rely on us.

“We achieved this while delivering a solid financial performance in the context of the pandemic – particularly in Asia – and laying firm foundations for our future growth.”

HSBC said its strategy for the future would include shifting capital to Asia, where it makes the majority of its earnings.

Last month the bank announced it would close 82 branches across the UK after the pandemic led to a greater shift to online banking, though it did say the closures were not entirely related to the lockdowns and restrictions introduced.