Why HSBC Shares Are Diving Premarket Wednesday
Portfolio Pulse from Lekha Gupta
HSBC Holdings PLC (NYSE:HSBC) shares dropped in premarket trading after reporting a decline in fourth-quarter revenue by 11% year-over-year to $13.021 billion, with net interest income (NII) falling 7% to $8.28 billion. The decline was attributed to notable items totaling $(2.7) billion. Despite the quarterly decline, FY23 saw a revenue increase of over 30% to $66.1 billion, with a significant rise in profit before tax to $30.3 billion, although below analysts' expectations. The bank also announced a new share buyback of up to $2.0 billion and a fourth interim dividend of $0.31 per share, with a total 2023 dividend of $0.61 per share. HSBC expects NII of at least $41 billion and a return on tangible equity in the mid-teens for 2024.
February 21, 2024 | 12:26 pm
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HSBC Holdings PLC reported a decline in Q4 revenue but saw a significant increase in FY23 revenue and profit before tax. The bank announced a new $2 billion share buyback and a total 2023 dividend of $0.61 per share. HSBC expects NII of at least $41 billion for 2024.
The premarket drop in HSBC's share price is directly related to the reported decline in Q4 revenue and the notable items impacting financials. However, the significant revenue growth in FY23 and the announcement of a new share buyback program and dividends may mitigate some of the negative sentiment in the short term. The outlook for 2024, including expected NII and return on tangible equity, suggests a positive trajectory, but the immediate reaction to the Q4 results and the below-expectation profit before tax for FY23 has led to a negative short-term impact.
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