Boost for HSBC as profits surge to £10.3bn ahead of AGM battle
Boost for HSBC as profits soar to £10.3bn: UK bank wins backing from major investor ahead of AGM battle
HSBC got a boost yesterday when it reported a rise in first-quarter earnings and gained backing from a major investor ahead of an AGM battle later this week.
The result of £10.3bn was three times higher than the profit for the same period last year, helped by rising interest rates and a range of one-off factors.
And it meant the UK-based bank was able to declare its first quarterly dividend since 2019.
The results came ahead of a shareholder meeting on Friday, when the board faced a standoff with China’s Ping An insurance group, which wants the lender to spin off its Asian operations in a bid to boost shareholder returns.
Strong numbers: HSBC reported a first quarter profit of £10.3bn – three times higher than its profit for the same period last year
Ping An will support a motion at the AGM urging restructuring that was rejected by HSBC.
But yesterday Norway’s sovereign wealth fund, the bank’s third-largest shareholder, said it would vote in line with the bank’s management.
It adds to support from shareholder advisory firms, Glass Lewis and ISS, who have also opposed the spinoff proposals.
Chief executive Noel Quinn acknowledged a “difference of opinion” with Ping An, but said both “share a desire to improve the bank’s performance.”
Quinn shrugged off turmoil elsewhere in the banking sector, saying HSBC had not seen a “negative impact”.
Shares climbed 3.5 percent, or 20.1 pence, to 593.9 pence, defying the declines of other lenders.
That was despite delays in the bank’s plan to sell its French and Canadian divisions, part of its plan to pivot to Asia, where the bank already earns most of its revenue.
Profits were boosted by £1.2bn from the acquisition of the UK arm of collapsed US lender Silicon Valley Bank (SVB), although a review of its balance sheet led it to write off £186m from the value of its assets .
Quinn said there had been “no nasty surprises” from the £1 bailout deal struck by the Treasury and the Bank of England after its US parent company collapsed.
HSBC plans to rename SVB UK but will not seek to cut staff or merge its London office into the headquarters of the wider group, Quinn said.