Cuts to interest rates in key markets will likely limit revenue growth from now on. At the same time, the significant sales of unwanted businesses that have reshaped HSBC in recent years and freed up capital for buybacks will soon be finished. The bank will be reliant on straight profits to fund future payouts.
HSBC Holdings reported a record US$30 billion pretax profit for 2023, but its shares still tumbled on Wednesday because fourth-quarter numbers were marred by several charges totalling nearly US$6 billion ($8 billion).
The good news is the UK-based bank still has plenty of spare cash to hand out to investors and will have more to pay out this year. The less good news is that HSBC will have to work harder to generate cash returns next year and beyond.
