HSBC reports fourth-quarter, full-year 2020 earnings

HSBC building in the Canary Wharf district of London, U.K.

Leon Neal | AFP | Getty Images

HSBC on Tuesday reported full-year earnings for 2020 that beat expectations and announced a dividend payout for the first time since the Covid-19 pandemic.

Europe’s largest bank by assets, which makes most of its revenues in Asia, said its reported profit before tax for 2020 fell 34% from a year ago to $8.78 billion. That beat analyst expectations of $8.33 billion, according to estimates compiled by HSBC.

Reported revenue was $50.43 billion for the year, down 10% from 2019.

HSBC’s latest financial report card was released as Hong Kong markets went for a lunch break. Its Hong Kong-listed shares jumped 5% when trading resumed.

“The pandemic inevitably affected our 2020 financial performance,” Noel Quinn, HSBC’s group chief executive, said in a statement accompanying the latest earnings report for the London-headquartered bank.

“The shutdown of much of the global economy in the first half of the year caused a large rise in expected credit losses, and cuts in central bank interest rates reduced revenue in rate-sensitive business lines,” he added.

Here are other highlights of the bank’s financial report card:

  • Expected credit losses increased by $6.1 billion in 2019 to $8.8 billion last year as HSBC shored up reserves in anticipation of the pandemic’s hit to business prospects.
  • Net interest margin, a measure of lending profitability, was 1.32% in 2020 — lower than 1.58% a year ago due to lower interest rates globally.
  • Common equity tier 1 ratio was 15.9% at the end of last year, up from 14.7% a year ago.

Changes to dividends

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