HSBC Holdings said on Monday that it is looking to restore dividend payments to pre-crisis levels as soon as possible and revert to paying quarterly dividends next year, as pre-tax earnings posted a double-digit rise on the back of higher interest rates.
The UK-based lender is also positive about its revenue outlook for the year, citing that net interest income is expected to reach at least $31 billion this year and rise to $37 billion in 2023.
The bank's adjusted profit before tax reached $6 billion in the second quarter of 2022, up by 13% in the previous year, the lender said in its 2022 interim results released on Monday. Revenue grew by 2%, primarily due to rising interest rates.
Noel Quinn, Group CEO of the bank, said they are confident of achieving a return on tangible equity of at least 12% from 2023 onwards, representing the lender's highest returns in ten years.
"As a result, we are providing more specific dividend payout ratio guidance of around 50% for 2023 and 2024," Quinn said.
"We will aim to restore the dividend to pre-COVID-19 levels as soon as possible. We also intend to revert to quarterly dividends in 2023."
The bank managed to reduce its operating expenses, which fell by 5%, while adjusted operating expenses were stable at $7.5 billion.
"The revenue outlook remains positive. Based on the current market consensus for global central bank rates and our continued mid-single-digit percentage lending growth expectations for 2022, we would expect interest income of at least $3 billion for 2022 and at least $37 billion for 2023," the lender said.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)