HSBC Surpasses Analyst Expectations with $5.2 Billion Q4 Profit Before Tax

A bright outlook for HSBC’s fourth-quarter earnings is driven by strong reported revenue growth and lower reported operating expenses. The bank’s profit before tax for the last quarter of 2022 was $5.2 billion, 108% higher than $2.5 billion a year ago beating analyst expectations of $4.97 billion. Data from the bank shows that annual revenue in 2022 was $51.73 billion compared to 2021 revenue of $49.55 billion. HSBC’s profit before taxes fell by a small margin and $2.4 billion was generated from the sale of banking operations in France.

According to Noel Quinn, group chief executive, they have now completed the first phase of their transformation, underpinning global connectivity with effective, broad-based profit generation. “We are on track to deliver higher returns in 2023 and have built a platform for further value creation,” he added in a conclusive statement. Since central banks raised rates to cope with inflation, banks have been generating strong net interest income, and HSBC wasn’t left behind. As a result, HSBC said it expects net interest income to be at least $36 billion in 2023, which is highly optimistic.

Shareholders may get a special dividend of 21 cents per share after it completes the sale of their banking business in Canada. This extra benefit will come in 2024 if the deal is concluded by the fourth quarter of 2023 and a dividend payout ratio of 50% for this year and the next. The numbers say it’s all rosy for both the bank and shareholders at large.