Hong Kong’s biggest currency-issuing bank, HSBC, may pay a “conservative” dividend for FY20 after reporting Q3 pre-tax profit of $3.07 billion, above the $2.07 billion estimates from resilient operational performance and bad loan allocations reductions, according to the company’s press release. The resumption comes after the bank canceled the 2019 final dividend and suspended FY20 dividends at its chief regulator’s request in the U.K.  

  • HSBC is focused on boosting sustainable non-interest income and reduce costs further, but there are concerns of historic low-interest rates, the resurgence of coronavirus cases, and geopolitical tensions between Washington and Beijing
  • The bank faces potential scrutiny from the U.S. and U.K. politicians for supporting Beijing’s controversial national security law. 
  • The bank has experienced a favorable trading environment that has boosted revenues in the global markets by 16%
  • HSBC pre-tax profit in the bank’s Hong Kong business fell 37% to $1.92 billion in Q3 compared to a pre-tax profit of $3.05 billion a year ago, while the Asian operations reported $3.22 billion in Q3, down from $4.7 billion a year earlier
  • HSBC U.K. ring-fenced bank covering retail operations pre-tax profit was $607 million, down from $624 million a year earlier, while non-ring business had $391 million profits compared to a loss of $17 million a year ago.

HSBC Holdings stock is gaining on dividend announcement. HSBA: LSE is up 6.76%