HSBC profits soar 78% but miss forecasts on China exposure

(Sharecast News) - HSBC on Wednesday posted a record jump in annual profits and announced a $2bn share buyback but missed forecasts as it was forced to take a $3bn hit from its exposure to a Chinese bank. The Asia-focused lender said full-year pre-tax profit rose 78% to $30.3bn driven by high global interest rates, but below the $34.1bn average estimate of brokers compiled by the bank. Revenue rose by 30% to $66.1bn.

However it also took a $3bn impairment on the its stake in China's Bank of Communications. The bank noted that China's recovery from the Covid pandemic had been tougher than expected, with the severe problems in country's heavily-indebted property sector dragging on growth.

Expected credit losses of $3.4bn were "notably related to mainland China commercial real estate exposures".

Chief executive Noel Quinn said the bank remained confident in the resilience of the Chinese economy, "and the growth opportunities in mainland China over the medium to long term".

Reporting by Frank Prenesti for Sharecast.com