HSBC Bank (HSBC) said it is planning a special dividend payment of $0.21 U.S. per share after it completes the sale of its banking business in Canada later this year.
HSBC said that the special dividend payment would come in early 2024 if the Canadian sale closes as expected at the end of 2023.
The London, England-based bank is in the process of selling its Canadian banking business to Royal Bank of Canada (RY) for $10 billion U.S. HSBC announced that it is exiting the Canadian market last November.
News of the special dividend comes as HSBC reported a fourth-quarter profit of $5.2 billion U.S., which was 108% higher than the $2.5 billion U.S. recorded a year ago, and better than the $4.97 billion U.S. expected by analysts.
The bank said the strong fourth-quarter results reflect revenue growth and lower operating expenses.
For all of 2022, HSBC reported revenue of $51.73 billion U.S., up from $49.55 billion U.S. in 2021.
However, the bank’s profit before tax for 2022 fell to $17.53 billion U.S. from $18.91 billion U.S. a year earlier.
HSBC said the 2022 pre-tax profit included a $2.4 billion U.S. impairment charge due to the planned sale of its retail banking operations in France.
HSBC, which is Europe’s largest bank by assets, said higher global interest rates support its forecast of at least a 12% return on tangible equity in 2023.
Banks around the world have seen strong net interest income as central banks raise interest rates to lower inflation. HSBC said it expects net interest income of at least $36 billion U.S. in 2023.
Due to the strong Q4 results, HSBC’s board of directors approved a regular dividend payment to shareholders of $0.23 U.S. per share.
The bank also said that it is establishing a dividend payout ratio of 50% for 2023 and 2024.
HSBC’s stock is up 0.67% over the last 12 months at $37.34 U.S. per share.
