HSBC Q1 Profit Triples On Strong NII, Declares First Quarterly Dividend Since 2019

HSBC Holdings PLC HSBC reported a Q1 2023 revenues increase of 64% Y/Y to $20.2 billion (+74% Y/Y in constant currencies).
Revenues benefited from higher net interest income (NII) across global businesses on the increased interest rates and gains related to the transactions in France and the U.K.
Net interest margin expanded by 50 basis points to 1.69%.
Loan and advances rose to $963 billion from $924 billion at the end of Dec-2022, led by the reclassification of $25 billion of balances related to retail banking operations in France and the addition of $7 billion from the Silicon Valley Bank (SVB) UK acquisition in March.
Deposits fell to $76 billion in Q1 from $67 billion a year ago, reflecting outflows in HSBC UK, Commercial Banking and Global Banking and Markets in Hong Kong. Combined customer deposits stood at $1.67 trillion in Q1.
Related: Silicon Valley Bank's UK Arm Bought By HSBC For About $1
Operating expenses declined 7% Y/Y to $7.6 billion, mainly due to lower restructuring and other related costs (following the completion of the cost-saving program at the end of 2022).
Profit before tax rose significantly to $12.9 billion for Q1 from $4.1 billion a year earlier, with an impairment charge reversal of $2.1 billion related to the planned sale of its French operation and a provisional gain of $1.5 billion from SVB UK acquisition.
EPS rose to $0.52 in Q1 from $0.14 in the prior-year quarter and beat expectations, as per Reuters.
HSBC reported credit losses and other credit impairment charges of $0.4 billion (vs. $0.6 billion).
Common equity tier 1 capital ratio stood at 14.7% in Q1 vs. 14.1% a year ago.
Dividend & Repurchase: HSBC announced its first quarterly dividend, since 2019, of $0.10 per share. The bank also declared a share buyback of up to $2 billion.
HSBC continues to expect NII of at least $34 billion in 2023 and RoTE of at least 12% for 2023 onwards.
Price Action: HSBC shares are trading higher by 4.76% at $37.51 on the last check Tuesday.

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