HSBC Posts Record Profit But Is Hit By $3 Billion China Write-off

HSBC Holdings reported a record annual profit that fell below analysts' forecasts due to a hefty $3 billion charge from its stake in a Chinese bank, as reported by Selena Li and Lawrence White for Reuters.

HSBC announced a new $2 billion share buyback for investors and stated it would consider a special dividend of $0.21 per share in the first half of 2024 once its Canada disposal is complete. I Photo: Tom Mascardo Flick

HSBC, with a market value of $160 billion, reported a pretax profit of $30.3 billion for 2023 on Wednesday, marking a 78% increase from $17.5 billion a year earlier.

However, this result was lower than the $34.1 billion mean average estimate of brokers compiled by HSBC.

The British lender announced a new $2 billion share buyback for investors and stated it would consider a special dividend of $0.21 per share in the first half of 2024 once its Canada disposal is complete.

Despite the record-high annual profit, HSBC was impacted by a $3 billion impairment on its stake in China's Bank of Communications.

The impairment on the bank's BoCom stake followed a review of the Chinese bank's likely future cash flows and outlook for loan growth and interest margins amid China's slower-than-expected economic recovery.

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