The HSBC Holdings logo is shown on a smartphone with HSBC visible in the background in this photo caption taken on February 20, 2024 in Brussels, Belgium.
Jonathan Raw | NoorPhoto | Good pictures
HSBC beat market expectations in its first-quarter earnings report on Tuesday, and announced the sudden departure of Noel Quinn, the group's chief executive.
Revenue came in at $20.8 billion, up 3% from the same period a year ago and compared to the average LSEG forecast of about $16.94 billion.
Pre-tax profit for the January-March period was $12.65 billion, down 2% from $12.89 billion a year ago. However, that number beat the $12.61 billion estimate by analysts compiled by the bank.
Profit after tax income fell to $10.84 billion – lower than the $11.03 billion seen in the first quarter of 2023.
HSBC, Europe's biggest bank by assets, has approved its first interim dividend of 10 cents per share and a special dividend of 21 cents per share following the completion of the sale of its banking business in Canada.
The company also announced the retirement of Quinn, who has held the position for nearly five years.
“The Board wishes to pay tribute to Noel's leadership. Noel has had a long and distinguished 37-year career with the Bank and we are very grateful for his significant contribution to the Group over the years,” said Group Chairman Mark. Tucker.
“During his tenure, HSBC has delivered a decade of record profitability and strong returns,” said Aileen Taylor, HSBC's Group Corporate Secretary and Chief Executive Officer.
Quinn will remain group CEO as the bank begins the search process for his successor. HSBC said he agreed to be available until his 12-month notice period, which ends on April 30, 2025, to support the transition.
Here are other highlights of the bank's Q1 financial report card:
- Net interest limitA measure of lending profitability fell to 1.63% – compared to 1.69% a year ago.
- Common Equity Tier 1 ratio – It measures the bank's capitalization in relation to its assets – 15.2% compared to 14.8% in the fourth quarter of 2023.
- Basic earnings per share came in at $0.54, up slightly from $0.52 in the same period a year ago.
HSBC reiterated its outlook for 2024, unchanged from guidance in February.
The bank continues to target an “in-teens” average firm return on equity by 2024, with bank net interest income of at least $41 billion, subject to global interest rate conditions.
HSBC expects its CET1 capital ratio to be within its medium-term target range of 14% to 14.5%, while its dividend payout ratio is targeted to be 50% in 2024, excluding significant items and related impacts.
Following the results, shares of HSBC rose 1.56% in Hong Kong, on pace for its seventh day of gains.
Correction: This story has been updated to accurately reflect that HSBC's first-quarter earnings for 2024 were 3% higher than a year ago. That figure was wrongly stated due to an editing error.
