HSBC's profits fell by 34% in 2020 as the international bank pledged to invest $6bn in its Asian markets as part of a renewed pivot to its historic roots.
Europe's largest bank said much of the fall was due to the impact of covid-19, trade tensions between the US and China and record low interest rates.
HSBC confirmed it would restart its dividend payments at $0.15 per share in cash, representing the bank's first payout to investors since October 2019.
In 2020, we experienced economic and social upheaval on a scale unseen in living memory. The external environment was being reshaped by a range of factors — including the impact of trade tensions between the US and China, Brexit, low interest rates and rapid technological development."
Mark Tucker, HSBC group chairman, said this morning: "This was a difficult decision and we deeply regret the impact it has had on our shareholders."
"We are therefore pleased to restart dividend payments at the earliest opportunity. The Board has announced an interim dividend of $0.15 for 2020, and adopted a policy designed to provide sustainable dividends in the future," Tucker added.
"In 2020, we experienced economic and social upheaval on a scale unseen in living memory. The external environment was being reshaped by a range of factors — including the impact of trade tensions between the US and China, Brexit, low interest rates and rapid technological development."
The UK-headquartered bank is accelerating its cost-cutting plans, which include the loss of 35,000 jobs in Europe and North America and the winding down or sale of poor performing parts of the business.
Commenting on the future of HSBC's retail operations in the US and France, CEO Noel Quinn said: "We don't believe we have a strong competitive position in the [US] retail business [and] Covid and low interest rates have made the challenge even greater. On France, we are in the final stages at the negotiations of a potential sale."
HSBC has confirmed several of its top executives will be relocated from London to Hong Kong as part of the pivot back to Asia, which generates the lion's share of its revenues.
Rob Murphy, MD of Financials at Edison Group, said: "As expected, HSBC announced plans to accelerate investment further toward Asian markets investing an extra $6.4bn over the next five years. As well as China and Hong Kong, the bank will invest heavily in the rest of Asia."
"Wealth management will be a key focus as well as technology in order to drive efficiency. For 2020 HSBC reported a 34% fall in profit before tax to $8.8bn on the back of the COVID-19 pandemic. Revenue was down 10% to $50.4bn due to lower interest rates, although partly offset by stronger performance in global markets."
"The figures highlight the pressures on the banking sector, that are forcing the bank to cut around 35,000 roles with the possibility of increasing the count over the coming months. The company is still exploring options for its US and French retail banking units."