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Summary
- Shares of HSBC Holdings jumped nearly 3 per cent in the mid-morning deals
- HSBC shares emerged as the top gainers among the 101 constituents of FTSE 100
- Pre-tax profits for HSBC UK Bank Plc jumped to over $1 billion in Q1 FY21
Shares of HSBC Holdings Plc (LON: HSBA), the London-headquartered investment bank and financial service juggernaut, jumped nearly 3 per cent in the mid-morning deals on Tuesday, 27 April, after it reported a rise of 82 per cent in the profit after tax (PAT) to $4.6 billion. The London Stock Exchange-listed component of HSBC advanced sharply after starting on a positive footing following the early morning release of Q1 FY21 financials.
According to the latest data available with LSE, the stock of HSBC rose as much as 2.68 per cent to an intraday high of GBX 434.10 from the previous close of GBX 422.75. Massive trading volumes were seen in the shares of HSBC as more than 9.45 million shares exchanged hands up until 1128 BST, translating into a total traded turnover of £32.80 million.
With a gain of more than 2 per cent, HSBC shares emerged as the top gainers among the 101 constituents of FTSE 100, providing a considerable positive point to the benchmark index.
HSBC Holdings Plc (27 April)
(Source: EODHD/Others, Thomson Reuters)
Meanwhile, The Stock Exchange of Hong Kong-floated shares of HSBC (HKG: 0005) managed to conclude with a gain of 2 per cent at HKD 46, witnessing a sharp spike of more than 2 per cent in the post-lunch session. During the day, the stock touched an intraday peak of HKD 46.45 apiece.
HSBC Q1 FY21 results: Highlights
- The pre-tax profits for HSBC UK Bank Plc jumped to more than $1 billion, with all the regions turning positive in the reporting quarter; the total profit before tax soared 79 per cent to $5.8 billion.
- The net revenue realised in the Jan-Mar quarter was 5 per cent lower to $13 billion, largely due to the impact of 2020 interest rate reductions in all global businesses.
- The adjusted profit before tax of HSBC swelled 109 per cent to $6.4 billion, accommodating the releases of allowances for expected credit losses (ECL).
- The falling ECL and other credit impairment charges in the particular quarter reflected the gradually improving economic outlook while interest rate headwinds persist.
- HSBC recognised a broadly stable net interest margin (NIM) of 1.21 per cent in Q1 2021 sequentially, while it was down 33 basis points as compared to the NIM of Q1 2020.
- The operating expenses increased by 9 per cent in the quarter due to higher restructuring costs and the rise in other expense heads related to the transformation programme, increased monetary allocation to technology.
- Importantly, HSBC said there was an increase of $2 billion in the quarterly lending on a reported basis, while it turned to $6 billion on constant currency terms.
- Notably, HSBC reiterated to not distribute quarterly dividends during 2021; nonetheless, the bank has indicated to announce an interim dividend during the half-year results of 2021 in August.
