HSBC Holdings reported better-than-expected earnings while pledging to restore quarterly dividends next year as it tries to stave off calls by its biggest shareholder for a break-up.
Helped by higher interest rates and rising currency trading revenue, adjusted pre-tax earnings rose 13% to $5.97 billion in the second quarter.
The bank was expected to post a profit of $4.96 billion.
“The progress we have made in growing and transforming HSBC means we are in a strong position as we enter the current interest rate cycle,” chief executive Noel Quinn said in a statement.
“We are confident of achieving a return on equity of at least 12% from 2023 onwards, which will be our best returns in a decade,” he added.
HSBC said it would seek to restore its quarterly dividend by next year, in a key move to meet the demands of its retail investor base in Hong Kong.
In April it emerged that HSBC’s biggest shareholder, China’s Ping Ang Insurance, was pushing HSBC to keep its Asian unit as a separate business, which would give investors a cleaner investment in the region’s growth.
HSBC financial adviser Ewen Stevenson said it was difficult to find value for shareholders in a possible split.
The company aims to return to paying a quarterly dividend in 2023, although it said it initially expects to be restored to a lower level than the historic quarterly dividend of $0.10 per share paid by the end of 2019.
Source: Capital
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