HSBC Holdings PLC took a charge relating to its Chinese commercial real-estate exposure and warned of a weaker performance in its wealth business in Asia, blemishing results for last quarter that saw the lender boost plans to return billions of dollars to investors.
The London-based bank is to initiate a share buyback of as much as US$1 billion, on top of an earlier US$2 billion program, it said in an earnings statement yesterday.
The lender posted a 79 percent increase in adjusted pretax profit to about US$4 billion last quarter, roughly in line with company-compiled estimates.
Photo: Reuters
The bank said it will pay a second interim dividend of US$0.18 per share.
The US$450 million impairment charge — largely relating to offshore China commercial real-estate exposures booked on its Hong Kong balance sheets — was the result of local policy measures that had led to an increase in “refinancing risk and liquidity pressures,” HSBC chief executive officer Noel Quinn said in a telephone interview.
“Those market conditions have improved, to some extent, in the early part of 2022,” Quinn said.
HSBC chief financial officer Ewen Stevenson said that the conditions were not a one-off, but were “eminently manageable.”
Separately, Quinn said in an earnings statement that the lender carries “good business momentum” into this year, but it expects a weaker wealth performance in Asia this quarter.
HSBC follows other global banks in boosting shareholder returns as rising interest rates buoy lending income.
At the same time, the economic outlook is being clouded by factors including geopolitical tensions, inflation and effects of the COVID-19 pandemic, including in HSBC’s key market of Hong Kong.
A year ago, HSBC unveiled a strategic refresh with its pivot to Asia. The strategy is focused on managing more of the wealth of Asia’s growing ranks of millionaires and billionaires, as well as the region’s mass affluent.
The plan involves an investment of US$6 billion across Asia, targeting wealth management, commercial banking and markets.
The past years have been dominated by repeated restructurings that have included cutting 35,000 jobs, relocation of senior executives from London to Hong Kong, and most recently coping with the fallout from the pandemic.
However, HSBC said Hong Kong’s curbs on travel and social interaction are hurting the economy, and might affect the ability to hire and keep staff in the Asian financial hub.
“The evolving COVID-19 restrictions in Hong Kong, including travel, public gathering and social distancing restrictions, are impacting the Hong Kong economy, and may affect the ability to attract and retain staff,” the bank said.
HSBC’s comments came after Standard Chartered PLC CEO Bill Winters last week said that the territory’s travel curbs could in the long run hurt its status as a financial hub compared with other regional centers.
Additional reporting by Reuters
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks
RSS