HSBC Stock Down On Q4 Loss, Cautious View For FY24 Banking NII

(RTTNews) - Shares of HSBC Holdings Plc were losing around 8 percent on the London Stock Exchange as well as in pre-market activity on the NYSE after the British lending major reported a net loss in its fourth quarter, while pre-tax profit plunged from last year, hit mainly by a hefty impairment charge related to China division. Revenues were weak, while Banking net interest income increased.

Looking ahead for fiscal 2024, the company expects Banking NII of at least $41 billion, lower than $44.1 billion recorded in fiscal 2023.

Regarding loan growth, the company issued a cautious outlook for its first half, expecting mid-single digit annual percentage growth over the medium to long term.

In its fourth quarter, loss attributable to ordinary shareholders was $153 million, compared to last year's profit of $4.38 billion. Loss per share was $0.01, compared to profit of $0.22 a year ago.

On a pre-tax basis, the company recorded profit of $977 million in the quarter, down from $5.05 billion last year.

The latest results were hit by charges of $5.8 billion, significantly higher than last year's charges of $1.5 billion.

HSBC recorded an impairment charge of $3 billion on its stake in China's BoCom. According to the company, recent macroeconomic, policy and industry factors resulted in the impairment. HSBC maintains a 19.03 percent interest in BoCom.

Adjusted earnings, excluding material notable items, were $0.25 per share.

Revenue declined 11 percent to $13.02 billion from $14.65 billion in the prior year. Net interest income was down 7 percent to $8.28 billion, and non-NII was down 17 percent to $4.74 billion.

Banking NII, however, was higher at $10.7 billion, compared to $10.2 billion last year, benefited by higher central costs of funding trading income.

In fiscal 2023, attributable profit climbed 56 percent from last year to $22.43 billion or $1.15 per share, pre-tax profit went up 78 percent to $30.35 billion, and revenues increased 32 percent to $66.06 billion.

In London, HSBC shares were trading at 593.60 pence, down 7.8 percent. In pre-market activity on the NYSE, the shares were at $37.60, down 8 percent.

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