HSBC to maintain dividend for 'foreseeable future', says new CEO

HSBC said it would also consider share buybacks after the provision of capital to support the growth of the business and maintaining the dividend

Chief executive John Flint is working on a new strategy for the bank

HSBC Holdings PLC (LON:HSBA) on Friday said it intends to maintain its dividend for the “foreseeable future”.

In the bank’s annual general meeting statement, new chief executive John Flint said: “After the provision of capital to support the growth of the business and maintaining our dividend, we will then consider share buy-backs, subject to regulatory approval.”

Flint, who replaced Stuart Gulliver as chief executive in February, added that he will update shareholders on a new strategy for the bank before the half year results.

HSBC finished carrying out its 2015 strategic plan at the end of last year, with actions including reducing the group’s risk-weighted assets, cutting costs and increasing its focus on its main growth market of Asia.

HSBC warns US-China trade war could hurt economy

But chairman Mark Tucker warned that HSBC faces external risks.

He said anticipated monetary tightening by central banks and the threat of trade tariffs could drag on economic growth.

“Rising international tensions could yet have wider economic implications, in particular the tariffs recently imposed on trade by the US and China,” he said.

“We continue to model and anticipate a wide range of scenarios as part of our day-to-day risk management to cover unlikely but not impossible events.”

The US and China have been locked in a dispute over President Donald Trump’s decision to put tariffs on imported aluminium and steel. In response, China has put duties on 128 products, including pork, wine and seamless steel pipes.

HSBC says it can handle risks to economy

Despite the risks facing the economy, Tucker said HSBC is well-equipped to manage any turmoil as a diversified business across a number of markets. In the meantime, HSBC remains “optimistic about the short-term prospects for the global economy”, Tucker said.

READ: HSBC full-year profits jump but shares fall as results miss forecasts

Tucker also announced the bank is reducing the number of board committees from seven to five.

HSBC in February reported a 141% surge in pre-tax profit to US$17.2bn in 2017, citing its pivot to Asia.

Quick facts: HSBC

Price: 579.4 GBX

Market: LSE
Market Cap: £117.69 billion

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