HSBC shares plummet despite $30B profit and new buyback plan

HSBC (LSE: HSBA) shares plunged over 7% on Wednesday despite the bank announcing a 78% jump in 2023 pretax profit to $30.35 billion, driven by higher interest rates.

Total revenue also increased 30% to $66.06 billion. However, performance suffered in Q4 with profit sinking 81% to $977 million, partly due to a $3 billion impairment related to its BoCom investment.

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HSBC declared a $0.31 per share fourth interim dividend, bringing the 2023 total payout to $0.61 – almost double 2022’s $0.32. The bank also unveiled plans for a new $2 billion share buyback program, which it expects to complete by the end of Q1 2024. This comes after $7 billion of buybacks last year.

CEO Noel Quinn said the “record profit performance” enabled HSBC to reward shareholders, but noted a “cautious” outlook for loan growth in the year’s first half. He targets mid-teen returns for 2024 as HSBC looks to capture growth opportunities across its global businesses.