HSBC pre-tax annual profit misses estimates on impairment costs; bank announces $2 billion further share buyback

HSBC‘s full-year 2023 pre-tax profit missed analysts’ estimates on Wednesday, hit by impairment costs linked to the London-based lender’s stake in a Chinese bank.

Europe’s largest bank by assets saw its pre-tax profit climb about 78% to $30.3 billion in 2023 from a year ago, but missed median estimates of $34.06 billion from analysts tracked by LSEG.

Chief Executive Noel Quinn also announced an additional share buyback of up to $2 billion, while noting that the bank suffered “a valuation adjustment of $3 billion” on its stake in Bank of Communications.

HSBC’s Hong Kong shares went into the midday trading break up about 1%, compared with 3% gains for the Hang Seng Index. The bank’s shares have gained about 0.5% so far this year after jumping 23% in 2023 as the Hang Seng Index shed 14%.

Here are the other highlights of the bank’s full year 2023 financial report card:

• Revenue for 2023 increased by 30% to $66.1 billion, compared with the median LSEG forecast for about $66 billion.
• Net interest margin, a measure of lending profitability, was 1.66% — compared with 1.48% in 2022.
• Common equity tier 1 ratio — which measures the bank’s capital in relation to its assets — was 14.8%, compared with 14.2% in 2022.
• Basic earnings per share was $1.15, compared with the median LSEG forecast for $1.28 in 2023 and 75 cents for 2022.

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