HSBC restarts dividend as profits soar to £7.8bn

·2 min read
HSBC
HSBC

HSBC has lifted bonuses for its bankers and vowed to reward investors after it became the latest bank to benefit from the post-lockdown economic rebound across key markets.

Europe's biggest bank has pledged to restart the interim dividend for investors and said it is considering share buybacks. Its first-half profits more than doubled on a year ago to $10.8bn (£7.8bn).

In a presentation to investors, the bank said that it had increased the amount earmarked for banker bonuses by £367m for the second quarter while for the first-half performance-related pay across the bank rose by $900m.

HSBC was able to release funds set aside to cover a possible surge in bad loans, freeing up $700m from its impairment pot to reflect the improved outlook.

The bank is also in the midst of the biggest restructuring in its history, cutting 35,000 jobs and focusing more on Asia markets in an attempt to boost returns. The bank said its plan remained on track.

China is a key market for HSBC, which was founded in Hong Kong in 1865 to support international trade between China and Europe. It remains based in London but makes most of its profits in Asia.

The bank is concentrating on its home territory, principally Hong Kong and China, as it seeks to make money when interest rates are rock bottom.

However, it has been heavily criticised for its controversial support of a Hong Kong security law, which criminalises anti-government movements and introduces life sentences or long jail terms for vaguely defined crimes.

The chief executive, Noel Quinn, repeated on Monday that HSBC followed the law in every country where it operated and was used to navigating complex situations.

He said he would not respond to "hypothetical questions" when asked what the bank would do if it was forced to choose between the US and China.

In contrast to its American peers the bank is also slashing office space as it prepares for a permanent shift in home working, revealing alongside its results that it has now closed or downsized 77 offices since the start of last year.

Mr Quinn said earlier this year the bank planned to slash about 8.6m sq ft of office space - equivalent to 112 football pitches.

Shares were flat at 397p in afternoon trading.

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