HSBC's full-year profit rose 78% thanks to record high interest rate growth

HSBC reported a 78% jump in full-year pre-tax profit, leading to record high growth amid high interest rates.

However, it fell short of forecasts due to a three billion dollar (£2.3 billion) write-down on its stake in the company. Chinese bank, Bank of communication.

The London-headquartered bank, which has a market value of $160bn (£126.6bn), reported total pre-tax profits of $30.3bn (£24bn) for 2023.

A year earlier, the bank had reported $17.5bn (£13.8bn) for 2022.

HSBC Group Chief Executive Noel Quinn said: “Our record profits in 2023 have enabled us to reward our shareholders with our highest full-year dividend since 2008, three share buybacks last year totaling seven billion (£5.5bn) and another share buyback of up to two billion dollars (£1.5 billion).

“This is a reflection of four years of hard work and the strength of our balance sheet in a higher interest rate environment.

Mr Quinn added: “We have a strong platform for growth with the opportunities that exist in our two home markets and in our international wholesale, market-leading transaction banking and wealth management businesses.

“We are focused on capitalizing on these growth opportunities, increasing the sustainability of our earnings and targeting teenage earnings in 2024.”

Expected credit losses and other loan impairment charges were $3.4bn (£2.6bn) for 2023.

The net collection in 2023 mainly consisted of third-stage payments, which were mainly related to mainland exposure China commercial real estate.

It also reflected continued economic uncertainty, rising interest rates and inflationary pressures.

Expected credit losses were 33 basis points of average gross loan amount, including a decrease of three basis points due to the inclusion of loans and advances classified as held for sale.

Customer bank accounts also increased to $41bn (£32.4bn) on a reported basis and $13bn (£10.2bn) in constant currency.

Operating expenses also fell by 2% to $32.1bn (£25.4bn).