HSBC makes pledge to shareholders after unveiling better-than-expected numbers

HSBC has vowed to return shareholder dividend payouts to pre-pandemic levels “as soon as possible” after it became the last of the big banks to unveil its first-half results.

Chief executive Noel Quinn made the pledge as he seeks to head off calls from China’s Ping An Insurance Group, which owns about 9.2 per cent of HSBC's, to spin off its burgeoning Asian arm from the UK business.

The banking giant reported a 15 per cent drop in first-half pre-tax profits to $9.2 billion (£7.5bn) for the six months to the end of June as it joined rivals in setting aside cash to cover potential loan losses, booking a $1.1bn charge. It said this partly reflected “heightened economic uncertainty and inflation” as soaring cost pressures hit the UK and wider global economy.

However, the profit out-turn was better than expected and the group promised it will revert to paying quarterly dividends next year.

Quinn said: “We understand and appreciate the importance of dividends to all of our shareholders. We will aim to restore the dividend to pre-Covid-19 levels as soon as possible. We also intend to revert to quarterly dividends in 2023.”

The results follow first-half numbers from rivals Barclays, NatWest and Lloyds Banking Group.

Richard Hunter, head of markets at investment platform Interactive Investor, said: “HSBC has brought the curtain down on the banks’ reporting season in mixed fashion, with a stronger second quarter rescuing the numbers.

“The group’s exposure to Asia has been something of a blessing and a curse over recent months, although prospects for the longer term are embedded in the HSBC investment case. Indeed, the share price has been one of the best performers in the sector of late, having risen by 28 per cent over the last year..”

The results from banking giant HSBC followed figures from rivals Barclays, NatWest and Lloyds Banking Group. Picture: Kirsty O'Connor/PA Wire

Shore Capital banking analyst Gary Greenwood noted: “The group continues to face attack from its largest shareholder Ping An, which is proposing that the group should break itself up in order to create more value given the perceived geopolitical risk associated with it being a global bank that straddles both the East and West. This brings added uncertainty to the investment case, in our view.”