Fourth quarter profits at HSBC more than doubled as the global banking group was bolstered by rising interest rates that pushed up costs for mortgages and loans for its customers.
The banking group, which is listed in the UK and Hong Kong, raised its dividend to the highest in four years and promised an additional special payment as it resists break-up pressure from its largest shareholder, Ping An. The Chinese insurance group is calling for HSBC to split off its more profitable Asian business.
The group reported $5.2 billion in pre-tax profits for the final three months of 2022, more than double the $2.5bn reported in the same period a year earlier.
Ping An owns a little more than eight per cent of HSBC's issued share capital and has for the past 10 months been pressing for a break-up of the group's western operations and its more profitable Asian business. Ping An argues that HSBC's global structure is untenable amid heightened tensions between the US and China.
READ MORE: Scots bank branches to shut as HSBC swings the axe across the UK
HSBC management led by chief executive Noel Quinn has said a break-up would be complicated and costly.
The banking group has declared a dividend of 32 cents per share and plans to distribute a special dividend 21 cents per share – worth roughly $4bn in total – once it has completed the sale of its Canadian business. However, earnings and profitability estimates for the forthcoming year were conservative, indicating that interest rates may have peaked.
"Return on tangible equity is still expected to be at least 12% for 2023 as a whole which will go some way to pushing back calls to break up the business, however economic and political risks remain and the bank will have to continue to walk a tightrope to please shareholders both in the east and in the west," said Rob Murphy, managing director at Edison Group.
Shares in HSBC closed yesterday's trading in London down 1.8% at 609.5p.
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