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HSBC’s Reported First Half Earnings on Monday

HSBC revenue expectations beat in its 2021 first-half earnings and announced its second dividend payout since the Covid-19 pandemic as the global economy bounces back. Revenue fell 4.5% from a year ago to $25.55 billion in the first six months of 2021 broadly in line with the $25.52 billion that analysts had projected.

The bank reported pre-tax profit more than doubled from a year ago to $10.84 billion in the January-to-June period this year. Analysts’ estimates compiled by the bank had pointed to a $9.45 billion in reported pre-tax profit during that period. HSBC shares in Hong Kong jumped more than 3% following the earnings release.

The company’s Group Chief Executive Noel Quinn said a brighter economic outlook has allowed the bank to start releasing provisions that were set aside for potential loan losses. That was the main driver of the bank’s improved profitability.Quinn also said that they were profitable in every region in the first half of the year. This performance enables us to pay an interim dividend for the first six months of 2021. The bank announced an interim dividend of $0.07 per ordinary share.

The bank, based in London, said it had earnings of 85 cents per share.The bank released a net $719 million in reported expected credit loss. Net interest margin, a measure of lending profitability, was 1.21% in the first half of 2021.That is  22 basis points lower than the same period last year. The bank said it targets a dividend payout ratio of 40% to 55% of reported earnings per ordinary share for 2021.

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