SINGAPORE/LONDON :HSBC brought forward its key profitability target by a year and more than doubled its annual profits as expected bad loans from the COVID-19 pandemic failed to materialise and it looked forward to rising interest rates lifting its income.
HSBC said it released $900 million in cash it had put aside in case pandemic-related bad loans spiked, as opposed to the same time a year earlier when it took a charge of $8.8 billion against expected losses. The bank said that if central bank interest rates rise worldwide as expected, the resulting improvement in its lending margins would mean it hits its goal of a double-digit return on equity in 2023, a year earlier than expected.
The bank reported revenue slipped 2per cent in 2021 due to low global interest rates and falling income in its markets business, but said rising rates policies this year and beyond should help to reverse the decline.