The HSBC first-quarter earnings report released on Tuesday went over the market predictions. However, the HSBC first-quarter earnings report was accompanied by the news of the departure of Group Chief Executive Officer Noel Quinn. Revenue reached $20.8 billion, a 3% increase from the previous year, exceeding the median LSEG forecast of approximately $16.94 billion.
HSBC First Quarter Earnings
In the January to March period, the HSBC first-quarter earnings showed a pretax profit of $12.65 billion, a decrease of about 2% from the previous year’s $12.89 billion. However, the HSBC first-quarter earnings report exceeded the analysts’ forecasts of $12.61 billion. After-tax profit decreased to $10.84 billion, down from $11.03 billion in the first quarter of 2023.
In the HSBC first-quarter earnings report, HSBC Holdings Plc saw a decrease in pre-tax profit compared to the previous year. Pre-tax profit decreased to $12.65 billion from $12.89 billion last year. Similarly, profit after tax decreased to $10.84 billion, down from $11.03 billion a year ago.
HSBC has also given the green light for a first interim dividend of 10 cents per share. This comes along with a special dividend of 21 cents per share after finalizing the sale of its banking operations in Canada.
HSBC CEO Steps Down
The HSBC first-quarter earnings were not the only announcement by the bank. Noel Quinn, who has been CEO for nearly five years, will retire. Group Chairman Mark Tucker talked about Quinn’s leadership and his 37-year career at the bank.
Aileen Taylor, HSBC’s group company secretary and chief governance officer, discussed Quinn’s various achievements. He added that under his leadership, the bank achieved record profits and the strongest returns in over a decade.
Quinn will continue as Group CEO while the bank seeks his successor. He has agreed to stay on until the end of his 12-month notice period, which concludes on April 30, 2025.
HSBC Outlook for 2024
Additionally, HSBC confirmed its outlook for 2024, which remains the same as stated in February. The bank aims for a return on average tangible equity for 2024. This comes with banking net interest income of at least $41 billion, depending on global interest rate conditions.
HSBC predicts its CET1 capital ratio to decrease within its medium-term target range of 14% to 14.5%. Additionally, the bank is aiming for a dividend payout ratio of 50% for 2024.
After the HSBC first-quarter earnings announcement, the bank’s shares in Hong Kong increased by 1.56%.
Despite the decrease in profit, according to the HSBC first-quarter earnings, earnings per share increased to $0.54 from $0.52 last year due to a lower share count.
The recent results were due to a $4.8 billion gain from selling the banking business in Canada. A $1.1 billion impairment partly offset this due to classifying business in Argentina as held for sale.
The decrease in profit before tax was also due to the absence of a $2.1 billion reversal from last year. This was related to the sale of retail banking operations in France and a $1.5 billion gain from the acquisition of Silicon Valley Bank UK Limited.
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