HSBC Profit Plunges on $3 Billion Write-down of Stake in Chinese Bank

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Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published February 21, 2024
HSBC building in London

Rasid Necati Aslim / Anadolu Agency via Getty Images

Key Takeaways

  • HSBC Holdings' American depositary receipts (ADRs) fell 8% Wednesday, as its fourth-quarter pretax profit sank after the British bank took a $3 billion charge on a Chinese bank stake.
  • HSBC also took a $2 billion charge on the sale of its French retail operations during the quarter.
  • The bank said it intends to pay a 21-cent-per-share special dividend once it completes the sale of its Canada business.

HSBC Holdings PLC's (HSBC) American depositary receipts (ADRs) plunged more than 8% Wednesday after the British bank's write-down of its stake in a large Chinese lender dragged its quarterly profit lower.

The London-based bank, which makes most of its earnings from Asia, said its fourth-quarter pretax profit plunged to $1 billion from $5.05 billion in the year-earlier period after it took an impairment charge of $3 billion related to its investment in China’s Bank of Communications.

HSBC owns a 19% stake in the Chinese bank.

HSBC also took a $2 billion charge on the sale of its French retail operations during the quarter.

Revenue dropped 11% to $13 billion during the latest quarter compared with the previous year, due to the sale of the French banking businesses, as well as charges for Argentina's hyperinflation.

Shares of the banking group fell even though the bank announced record full-year pretax profit for 2023 of $30.3 billion, along with plans for a $2 billion share buyback and a 31-cent-per share dividend for the quarter. The bank also said it intends to pay a 21-cent-per-share special dividend once it completes the sale of its Canada business.

HSBC's ADRs were changing hands at $37.51, off 8%, as of about 1:30 p.m. ET Wednesday. They've fallen around 7.5% so this year.

HSBC 1-year share-price performance

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  1. HSBC Holdings PLC. “HSBC Holdings PLC Annual Results 2023.”

  2. Reuters. “HSBC's Shares Slide as Record Profit Marred by $3 Billion China Hit.”

  3. HSBC Holdings PLC. "HSBC HOLDINGS PLC 2023 RESULTS – HIGHLIGHTS," Page 5.

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