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HSBC Q2 Profit Climbs, Revenues Down; Says Outlook More Positive; Stock Up

Asia-focused lender HSBC Holdings Plc (HSBC,HSBA.L) reported Monday that its second-quarter profit after tax was $3.9 billion, $3.2 billion higher than the prior year.

Profit before tax was $5.1 billion, a growth of $4.0 billion from the prior year.

Reported revenue for the quarter was down 4 percent, mainly due to lower revenue in Markets and Securities Services or MSS, as well as the impact of lower interest rates. This was more than offset by net releases in reported ECL and lower reported operating expenses.

Looking ahead, the company said while uncertainties remain, the outlook is more positive with evidence of growth in strategic areas.

The company expects mid-single-digit lending growth for the full year, which is expected to translate into low-single-digit RWA growth as it progresses with RWA reduction actions.

Further, the company now expects to move to within target dividend payout ratio range of 40 percent to 55 percent of reported earnings per ordinary share in 2021.

In Hong Kong, HSBC shares were gaining 3.6 percent to trade at HK$44.60.

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