HSBC to cut jobs and resume dividend payments as profits slump by a third

Bank says it is shifting its focus to Asian markets

(Getty Images)

HSBC is expected to cut jobs and will resume paying dividends despite the bank’s pre-tax profits slumping by just over one-third in 2020.

Britain’s largest bank said on Tuesday that pre-tax profits fell to $8.8bn (£6.3bn) for the year ending 31 December, down from $13.35bn a year earlier.

The bank suggested that loan losses in Europe due to the Covid-19 pandemic and heightened geopolitical uncertainty were contributory factors.

Although annual profits dropped, they were still marginally better than some analysts had predicted.

The group’s chief executive, Noel Quinn, said HSBC’s goal in 2020 had been to "provide stability in a highly unstable environment for our customers, communities and colleagues”.

He added: “I believe we achieved that in spite of the many challenges presented by the pandemic and heightened geopolitical uncertainty.

“Our people delivered an exceptional level of support for our customers in very tough circumstances, while our strong balance sheet and liquidity gave reassurance to those who rely on us.

“We achieved this while delivering a solid financial performance in the context of the pandemic – particularly in Asia – and laying firm foundations for our future growth.”

The bank said in its annual results that it will resume paying a dividend of 15 cents per share despite the drop in earnings, after the Bank of England last year partially lifted a ban on shareholder payouts.

HSBC said its strategy for the future would include shifting capital to Asia, where it makes the majority of its earnings.

The bank said it has plans to invest about $6bn in the region in the coming years and has singled out the Singapore, China and Hong Kong markets as areas for growth.

Last month the bank announced it would close 82 branches across the UK after the pandemic led to a greater shift to online banking, though it did say the closures were not entirely related to the lockdowns and the restrictions that were introduced.