HSBC Reports Strong Half-Year Results Amid Mixed Effects
HSBC, Europe’s largest bank, posted a net attributable profit of 16.586 billion dollars for the first half of 2024, down 2.24 percent from the prior-year period. The figure reflects the health of a diversified lender navigating a shifting macro landscape across key markets. According to HSBC, the results show resilience despite uneven economic signals and ongoing market recalibrations.
The reported net profit includes a one-off gain of 4.8 billion dollars from the Canada business sale, alongside a 1.2 billion-dollar charge linked to Argentina’s anticipated exit. In a filing with the Hong Kong Stock Exchange, the bank noted that the year-ago period benefited from gains tied to SVB UK and the reversal of losses from selling France’s commercial banking activities. The commentary underscores how exceptional items can influence reported earnings in a volatile regional mix.
From January to June, HSBC’s revenue rose 1.13 percent year over year to 37.292 billion dollars. This topline growth came despite pressures from portfolio reallocation and deposit migrations that tempered net interest income in some regions, while growth accelerated in the United Kingdom and other markets. Net interest margin stood at 1.62 percent, eight basis points below the prior year. The period highlights how shifts in funding costs and business mix can affect profitability even as core markets show momentum.
The outgoing chief executive, Noel Quinn, described the results as powerful and evidence that the bank’s strategy is delivering. He expressed confidence in the path ahead even if interest rates stay lower for longer, noting that the plan is designed to weather different rate environments while pursuing sustainable returns.
Quinn Reflects on Five Years at the Helm
Quinn, who will hand over the reins to chief financial officer Georges Elhedery in September, expressed satisfaction with performance across his five-year tenure. He stated that the objective was to achieve returns aligned with HSBC’s prestige and that the platform created provides a solid foundation for future growth.
By the end of the semester, HSBC reported net lending of 938.257 billion dollars, down 2.22 percent from late 2022. Deposits stood at 1.59 trillion dollars, down 1.11 percent in the first six months of the year. The figures illustrate how lending and funding dynamics evolved over the period, influencing liquidity and risk management strategies.
Tier 1 capital ratio reached 17.3 percent at the end of June, slightly above the 2022 year-end level. Ongoing investments in technology and inflationary pressures contributed to a 5.43 percent year-on-year increase in operating expenses. These indicators reflect the bank’s ongoing balance between modernization efforts and cost discipline as the business adapts to a shifting environment.
Looking ahead, Quinn affirmed belief in the strategy and the earnings growth model even in a scenario with potentially lower rates. HSBC’s guidance targets a return on tangible equity around 15 percent for 2024 and the following year, with expected net interest income near 43.0 billion dollars for the current year. Several risks are noted, including global tensions in Ukraine, the Israel-Hamas conflict, and China’s property market. The outlook emphasizes a disciplined approach to risk, capital allocation, and strategic execution amid global uncertainties.
In summary, the bank maintains a constructive view on its trajectory, balancing scaling opportunities with careful attention to geopolitical and macroeconomic headwinds as it pursues sustained profitability and capital strength. The commentary reinforces HSBC’s focus on disciplined growth, capital efficiency, and resilience across its footprint.