Focus on the BIG picture.
Sunday, Jan 19, 2025
Outside the box.
HSBC shares dive 8% as profit expectations fail to satisfy investors
HSBC's shares fell sharply by 8% as its quarterly and annual profits disappointed investors.
The bank's Q4 pretax profits dropped to $1 billion from $5 billion the prior year, weighed down by hefty charges related to its Chinese investment and French retail banking exit.
Despite a record annual pretax profit of $30.3 billion for 2023, the results missed analysts' estimates.
The bank announced a new $2 billion share buyback program, and the CEO's pay doubled in 2023. Richard Hunter of Interactive Investor acknowledged HSBC's strong yearly profits and the positive impact of higher interest rates on its balance sheet, highlighting a 30% revenue surge driven by net interest income. Commercial Banking and Global Banking and Markets showed notable revenue growth.
However, Hunter pointed to specific cautions, like the bank's exposure to Chinese commercial property. Market reactions hint at future challenges for HSBC, including potential global interest rate declines and the shaky final quarter.
HSBC anticipates slow early growth in the year with a gradual rebound, while the troubled Chinese economy and real estate sector pose significant concerns.
Despite a record annual pretax profit of $30.3 billion for 2023, the results missed analysts' estimates.
The bank announced a new $2 billion share buyback program, and the CEO's pay doubled in 2023. Richard Hunter of Interactive Investor acknowledged HSBC's strong yearly profits and the positive impact of higher interest rates on its balance sheet, highlighting a 30% revenue surge driven by net interest income. Commercial Banking and Global Banking and Markets showed notable revenue growth.
However, Hunter pointed to specific cautions, like the bank's exposure to Chinese commercial property. Market reactions hint at future challenges for HSBC, including potential global interest rate declines and the shaky final quarter.
HSBC anticipates slow early growth in the year with a gradual rebound, while the troubled Chinese economy and real estate sector pose significant concerns.
