HSBC declares first quarterly dividend in 4 years as profits jump to $12.9bn

HSBC has announced its first quarterly dividend since the pandemic after profits at the start of 2023 more than tripled.

Europe’s biggest bank said Tuesday it would pay shareholders a 10 cents (8p) per share dividend, having last made a quarterly payout in 2019, and conduct a share buyback of up to $2billion (£1.6billion).

The FTSE 100 company revealed pre-tax earnings skyrocketed to $12.9billion between January and March, up from $4.2billion a year earlier and smashing analyst expectations of $8.6billion.

Dividend: Britain’s largest banking group announced that it would pay shareholders a 10 cents per share dividend, having last made a quarterly payout in 2019

Profit growth was driven by central banks hiking base rates in response to soaring inflation, thereby boosting HSBC’s net interest income.

Profits also received a major uplift from a $1.5billion provisional gain related to the purchase of Silicon Valley Bank’s UK business after the lender abruptly collapsed in March due to the plunging value of its long-term bond portfolio.

The bank further benefited from reversing a $2.1billion impairment on the planned sale of its retail banking operations in France due to doubts about the deal’s future.

HSBC shares jumped 4.6 per cent to 600p in early trading, having risen by 14.3 per cent since the start of the year,  

HSBC chief executive Noel Quinn said: ‘Our profits were spread across our major geographies, and all three global businesses performed well as we continued to meet our customers’ needs through our internationally connected franchises.

‘With the good momentum we have in our business, we expect to have substantial future distribution capacity for dividends and share buybacks.’