HSBC Q1 profits beat estimates

HSBC beats profit estimates, announces $3 billion buyback and dividend hike.

HSBC Holdings (LSE: HSBA) kicked off 2024 with a stronger-than-expected performance, reporting a first-quarter profit of $12.65 billion. This surpassed analyst consensus estimates of $12.61 billion, despite a slight dip in net interest income compared to the prior year.

While net interest income fell 3.4% year-on-year to $8.65 billion, it remained above analyst expectations of $8.50 billion. Net operating income, however, saw a positive trend, rising 1.5% to $20.03 billion compared to $19.74 billion in the previous year.

HSBC announced a first interim dividend of $0.10 per share, an increase from the $0.09 distributed last year. Additionally, a special dividend of $0.21 per share will be paid out following the successful sale of the bank’s Canadian business.

Further boosting shareholder returns, HSBC launched a new share buyback program of up to $3 billion. This follows the completion of the previously announced $2 billion buyback program revealed with their full-year results.

CEO Noel Quinn informed the board of his intention to retire after leading the company for nearly five years and dedicating a total of 37 years to HSBC. Quinn plans to pursue “a portfolio career” after stepping down.

“We’re pleased with our start to 2024,” said Quinn. “Our good profit performance…has enabled us to continue the trend of rewarding our shareholders.”

HSBC Chair Mark Tucker expressed gratitude for Quinn’s significant contributions, highlighting his role in driving the bank’s transformation strategy and creating a more focused business model.

The company maintained its financial guidance provided in February, targeting a return on average tangible equity in the mid-teens for 2024, excluding notable items. They also reaffirmed their expectation for banking net interest income of at least $41 billion.

Shares in HSBC were up 3% on Tuesday morning.

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