Shares in HSBC (HSBA) fell 1.54% to 538p following the publication of full year results to 31 December 2021, that were below analysts' estimates.
Nonetheless future guidance was more positive with the group’s 10% plus return on tangible equity being brought forward by a year to 2023. Moreover the group has announced a $1 billion share buyback.
PROFIT TAKING
HSBC’s shares have increased by 22% year-to-date and currently sit 4% below their 12-month high. Following a strong run the shares have regained their premium rating and given the mixed nature of the results a degree of profit taking is to be expected.
Reported profit before tax of $21.91 billion missed expectations of $22.03 billion while reported earnings per share of $0.62 was in line with expectations.
The full year dividend of $0.25 per share was marginally ahead of a $0.24 per share forecast. Reported return on tangible equity of 8.3% exceeded analyst's expectations of 8%.
The results were impacted by a $413 million impairment charge taken in relation to the group’s Chinese commercial real estate exposure taken in the fourth quarter. This was partly offset by positive benefits on income ($27 million), and costs ($187 million), and joint venture and associate income ($102 million).
EXPERT VIEW
According to Shore capital analyst Gary Greenwood ‘the shares are now trading back in line with out latest published fair value of 545p?It may note be enough to warrant maintaining our current BUY stance’.
