Global banking major HSBC reported a de-growth of 1% YoY in its Q2 profit before tax to $5bn, while profit after tax came in at $5.8bn, driven by a tax credit of $800mn. Total revenues were up 12% YoY to $13.1bn. Segmental revenue for Global banking and markets (GBM) rose 15% YoY to $3.8bn, Wealth and personal banking (WPB) grew 5% YoY to $5.7bn, and Commercial banking (CMB) increased by 19% YoY to $3.6bn. Net interest income (NII) rose 20% YoY to $7.5bn reflecting interest rate rises and lending growth. Non-NII income increased 2% YoY to $5.7bn. Gains from volatility in markets, and a gain in insurance were broadly offset by adverse impacts on the insurance market and lower fee income in GBM and WPB. The expected Credit Loss charge was $448mn vs. a net release of $255mn in Q2 last year. Net interest margin (NIM) improved 15bp YoY to 1.35%. In H1, the lender completed the acquisition of AXA Singapore, increased its stake in HSBC Qianhai Securities to 90%, took complete ownership of the HSBC Life China insurance business, and finalized plans to exit businesses in Greece and Russia. The bank declared an interim dividend of $0.09/share and completed both the $2bn buyback programme announced in 2021 and the further $1bn buyback also announced at its annual results in February. HSBC expects net interest income of at least $31bn for 2022 and at least $37bn for 2023 and a dividend pay-out ratio of around 50% for 2023 and 2024. CET1 ratio came in at 13.6%, 50bp lower QoQ.
HSBC’s 6.375% Perp was up 0.63 points to 100.53, yielding 6.31%.