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HSBC revises its profitability target

HSBC revises its profitability target

The company reported a 34% drop in annual profit

Stocks impacted: HSBC Holdings (HSBC)

HSBC abandoned its long-term profitability target after the COVID-19 pandemic saw its annual profits drop sharply. The company ditched its goal of achieving a return on tangible equity of 10 to 12% and said instead it will aim for 10% over the medium term. The bank said it has reduced more than $1 billion of gross operating costs in 2020. Europe's biggest bank by assets reported a 34% drop in annual profit while profit before tax arrived at $8.78 billion for 2020, down from $13.35 billion a year earlier. HSBC said it would pay a dividend of $0.15 a share in cash, the first payout announced since October 2019, after the Bank of England blocked all big lenders from paying dividends or buying back shares in 2020 to conserve capital. The firm said it is in talks with a potential buyer for its troubled France retail banking unit, which it has been trying to dispose for over a year. HSBC stocks in London were 1.23% lower early in the session.

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