On 2 August 2021, the HSBC Holdings Directors approved an interim dividend for the 2021 half-year of $0.07 per ordinary share in respect of the financial year ending 31 December 2021. This distribution amounts to approximately $1,430m and will be payable on 30 September 2021. No liability is recognised in the financial statements in respect of these dividends.
Other financial highlights include:
• Reported profit after tax increased by $5.3bn to $8.4bn and reported profit before tax increased by $6.5bn to $10.8bn. A fall in revenue reflected 2020 interest rate reductions and lower Markets and Securities Services ('MSS') revenue relative to a strong 1H20. This was more than offset by releases in expected credit losses and other credit impairment charges ('ECL'). Reported profit in 1H20 included an impairment of software intangibles of $1.2bn, mainly in Europe.
• All regions profitable in 1H21, notably HSBC UK Bank plc reported profit before tax of over $2.1bn in the period. Despite interest rate headwinds, there was continued strength in Asia and a material recovery in profitability in all other regions, reflecting a net release in ECL as the economic outlook improved.
• Reported revenue down 4% to $25.6bn, primarily reflecting 2020 interest rate reductions and lower MSS revenue in Global Banking and Markets ('GBM'). These reductions were partly offset by net favourable movements in market impacts in life insurance manufacturing and valuation adjustments in GBM.
• In 1H21, lending increased by $21.5bn on a reported basis, reflecting growth in Wealth and Personal Banking ('WPB') and Commercial Banking ('CMB'). Deposits grew by $26.3bn on a reported basis, with increases in all global businesses.
• Net interest margin ('NIM') of 1.21% in 1H21, down 22 basis points ('bps') from 1H20. NIM in 2Q21 of 1.20% remained stable compared with 1Q21.
• Reported ECL were a net release of $0.7bn, compared with a $6.9bn charge in 1H20. The net release in 1H21 primarily reflected an improvement in the economic outlook since 2020. The reduction also reflected low levels of stage 3 charges in 1H21, as well as the non-recurrence of a large charge in 1H20 related to a corporate exposure in Singapore.
• Reported and adjusted operating expenses increased 3%, primarily due to a higher performance-related pay accrual as profitability improved, as well as continued investment, partly offset by the impact of cost-saving initiatives.
• Return on average tangible equity ('RoTE') (annualised) of 9.4%, up 5.6 percentage points compared with 1H20.
• Common equity tier 1 ('CET1') ratio of 15.6%, down 0.3 percentage points from 31 December 2020, reflecting an increase in RWAs from lending growth and a decrease in CET1 capital including the impact of foreseeable dividends.
