HSBC Holdings PLC (LSE:HSBA) pledged to return more cash to shareholders as it unveiled a trebling of first-quarter profit.
The Asia-focused bank said pretax profit soared by US$8.7bn to US$12.9bn in the three months to 31 March 2023 from US$4.1bn a year prior, including a provisional gain of US$1.5bn on the acquisition of Silicon Valley Bank UK Ltd in March.
The FTSE 100-listed lender said it planned a share buy-back of up to US$2bn which is expected to knock around 25 basis points (bps) off the CET1 capital ratio.
Noel Quinn, group chief executive, said: “With the good momentum we have in our business, we expect to have substantial future distribution capacity for dividends and share buy-backs.”
Revenue increased by 64% to US$20.2bn, driven by higher net interest income in all global businesses due to interest rate rises, while net interest margin of 1.69% was 50bps higher compared to the first quarter of 2022 and broadly flat when compared to the previous quarter.
Bad debt charges fell to US$0.4bn from US$0.6bn and operating expenses of US$7.6bn were 7% lower than last year.
Lending to customers rose by US$40bn in the quarter while HSBC reinstated the dividend for the period with a US$0.10 per share payment after passing last year.
The bank said its common equity tier 1 capital ratio of 14.7% was up 0.5 percentage points compared to the previous quarter and it remains confident of achieving its return on average tangible equity target of at least 12% for 2023 onwards.
Net interest income expectations are unchanged from full-year guidance, HSBC said.