HSBC Holdings Plc will consider a special payout after the sale of its Canadian unit as the bank attempts to face down a campaign from its largest shareholder to pursue a wider break-up of the business.
(Bloomberg) — HSBC Holdings Plc will consider a special payout after the sale of its Canadian unit as the bank attempts to face down a campaign from its largest shareholder to pursue a wider break-up of the business.
Reporting results that beat analyst estimates, HSBC said it would consider a special $0.21 dividend after the completion of the unit sale amid an ongoing tussle with major shareholder Ping An Insurance Group Co of China. The bank announced the all-cash $10 billion sale of HSBC Canada in November as it seeks to convince investors of a plan to refocus on Asia is a better bet than Ping An’s call to consider spinning out its business in the region.
HSBC reported adjusted pretax profit rose 92% to $6.83 billion in the fourth quarter, above the $6.51 billion consensus estimate of analysts compiled by Bloomberg.
“We are on track to deliver higher returns in 2023 and have built a platform for further value creation,” Chief Executive Noel Quinn said in a statement. “With the delivery of higher returns, we will have increased distribution capacity, and we will also consider a special dividend once the sale of HSBC Canada is completed.”
The bank also said it will consider other potential share buy-backs, in addition to any existing program. HSBC previously said it would only resume buybacks once its core capital moved back within its target range of 14% to 14.5%.
The results are the first under new chief financial officer Georges Elhedery, who took over from Ewen Stevenson at the start of the year.
Cost pressures are one of the biggest issues facing the bank. Stevenson told a conference in September that rising inflation could force the lender to significantly increase salaries and that “brutal” cuts could be needed to keep a lid on costs.
HSBC is in the midst of an overhaul of its global operations, most recently announcing the sale of its Canadian unit to Royal Bank of Canada, to refocus on Asia. That deal is expected to close later this year and generate a pretax gain of $5.7 billion.
The bank is also looking to develop its operations in some of Asia’s biggest markets. HSBC has put a renewed focus on building up its Indian unit and plans to open an onshore private banking service for the country’s wealthiest citizens this year.
Read More: HSBC Is Betting Big on India’s $400 Billion Pile of Wealth
The bank’s management was bogged down last year in efforts to head off a campaign by Ping An Insurance Group Co., the company’s largest shareholder, to force it to consider a spin out and separate listing of its Asian operations. HSBC has said it can create more value by keeping and growing the business.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.