HSBC Holdings plc (NYSE:HSBC) Q4 2023 Earnings Call Transcript
HSBC Holdings plc (NYSE:HSBC) Q4 2023 Earnings Call Transcript February 21, 2024
HSBC Holdings plc isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Unidentified Company Representative: Good morning, good afternoon, good evening, ladies and gentlemen, and welcome to the Investor and Analyst Webinar for HSBC Holdings plc’s 2023 Annual Results. For your information, this webinar is being recorded. At this time, I will hand over to Noel Quinn, Group Chief Executive
Noel Quinn: Good afternoon for those in Hong Kong and great to see you all. Good morning to those watching in London and around the world. Before Georges takes you through the Q4 numbers, I'll make some opening comments. First, I'm really pleased with the performance that the team delivered in 2023. We reported $30 billion of PBT for the first time ever and we delivered a return on tangible equity of 14.6% or 15.6% excluding material notable items. Second, there were some items in the fourth quarter, which make it harder to understand the underlying performance. Georges will take you through them in detail. But I want to stress there was still good underlying growth in the fourth quarter excluding the impact of notable items and Argentina hyperinflation our profit before tax was $7.3 billion.
Third, we distributed $19 billion of capital returns to our shareholders in respect of 2023. This included a full-year dividend of $0.61 per share which is the highest since 2008 and $7 billion of share buybacks which have reduced the share count by over 4% at completion of the current buyback. Fourth, we still expect to have substantial distribution capacity going forward. We've announced a further share buyback of up to $2 billion. We're committed to considering a special dividend of $0.21 per share as a priority use of the Canada proceeds subject to the completion of the transaction, and we finished the year with a strong CET 1 ratio of 14.8% which will be further boosted by the Canada deal. Fifth, we remain committed to cost discipline.
We have flow through impact of 2023 inflation on our costs this year but expect a downward trend in inflationary pressures in 2025 and beyond. We continue to invest in growth opportunities and the digitization of our business to drive incremental efficiencies. We remain very focused on funding much of that investment through cost saving initiatives. Finally, we expect to have further opportunities to grow revenue even in a lower rate environment. Georges will take you through how we're reducing our sensitivity to rate movements and we do acknowledge the downside risks to NII, but we're confident that we have the levers for growth that allow us to deliver mid-team returns in 2024. I'll take you through some of these levers later but let me now hand over to Georges.
Georges Elhedery: Thank you, Noel. Warm welcome to everyone here in Hong Kong. For those of you watching in London, good morning, and thank you for joining our full year 2023 results call. We delivered a good underlying business performance in the fourth quarter, but let me first start by clarifying that our reported profit before tax was impacted by $5.8 billion of notable items and the further $0.5 billion from Argentina hyperinflation including the more than 50% devaluation of the peso in December. Let me unpack three of those notable items. First, we reinstated the impairment on the sale of our France retail business as signaled at the third quarter. Second, we booked a $0.4 billion of Treasury disposal losses in the quarter again in line with the guidance at the third quarter to extend the duration of hedges in anticipation of rate decreases.
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