Pre-tax earnings sank 15% to US$9.2 billion after it took a US$1.1-billion hit on possible credit losses “to reflect heightened economic uncertainty and inflation”, HSBC said.

The result “reflected a more normalised level of expected credit losses compared with the Covid-19 releases made last year, as well as the macroeconomic impact of the Russia-Ukraine war”, added chief executive Noel Quinn.

However, net profit rose 14% to US$8.3 billion in the reporting period partly on a large one-off tax credit.

Quarterly dividends

The annual revenue outlook was positive, Quinn noted, with net interest income expected to reach at least US$31 billion this year and US$37 billion next year as interest rates rise.

The group was confident of achieving its best returns in a decade in 2023.

“We also intend to revert to quarterly dividends in 2023,” he added.

London-headquartered HSBC was among a number of major banks to cancel dividends early in the pandemic after a de facto order from the Bank of England – a move that upset some Hong Kong investors.

Today’s results come one day before HSBC executives’ first face-to-face meeting with shareholders from the Asian financial hub in three years.