HBSC PLC’s (LON:HSBC) profits and revenues fell in 2020, while the bank also cut its long-term targets due to the low-interest-rate environment.
As expected, HSBC confirmed its future focus will be pointed even more towards Asia though there was no decision on the US retail banking business, where speculation had been it would shut down.
Revenues for the year to end-December 2020 fell 10% to US$50.4bn (GBP35.8bn), with net lending margins down by a quarter of a per cent due to low interest rates globally.
Profits fell 34% to US$8.8bn, which was slightly better than expected but affected by higher bad debt charges, said the bank.
The long-term profit target of a return of 10-12% on equity has also been reduced to 10%.
HSBC followed its UK banking peers and reinstated its dividend with an interim payment of 15c, the first payment since October 2019 following the ban by the Bank of England soon after the first lockdown started.
Noel Quinn, chief executive, said that going forward the bank intends to invest in the areas it is strongest, which he named as wealth and personal banking especially high net worth Asian clients and on the commercial side trade and capital flows into Asia.
Growth in Asia will be driven by US$6bn of additional investment over the next five years.
In investment banking, HSBC said it intends to shift capital, investment and staff from Europe and North America to Asia while it is “exploring organic and inorganic options” for its US retail bank.
The bank said it would also continue with its cost-cutting, with 35,000 jobs still earmarked to be shed across all of its operations.