Globally increasing interest rates have aided the global banking behemoth HSBC in nearly doubling its quarterly profit.
For the final three months of 2022, the London-based company reported a profit before taxes of $5.2bn (£4.3bn), an increase of more than 90 percent compared to the same period one year prior.
However, pre-tax profit for the full year decreased by $1.4 billion to $17.5 billion as the company absorbed the cost of selling its retail banking operations in France.
Additionally, HSBC is selling its Canadian operations.
The bank stated that it would use the proceeds from the sale to pay dividends to shareholders once the transaction is finalized.
The year 2022 was another prosperous one for HSBC, according to CEO Noel Quinn. He added, “We are on schedule to deliver higher returns in 2023.”
In June 2021, the company reached an agreement to sell its French retail bank, putting an end to its lengthy efforts to dispose of the business as it shifted its focus to Asia.
HSBC now anticipates a $2.4 billion loss in its profits due to this sale.
HSBC agreed to sell its Canadian banking business to the Royal Bank of Canada in November.
The transaction, valued at 13.5 billion Canadian dollars ($10 billion; £8.3 billion), is anticipated to close this year.
As a result of pressure from its largest shareholder, the Chinese insurance giant Ping An, HSBC has been selling enterprises.
Since last year, Ping An has publicly demanded that HSBC separate its Asian operations to increase profits.
In recent years, HSBC has also been shedding positions to reduce expenses.
Since the pandemic, HSBC announced in November that it would be closing 114 more branches in the United Kingdom, as the number of customers using them had decreased substantially.
The bank said it would try to rehire impacted workers but warned that 100 would be laid off.
This followed announcements of the closure of additional branches in 2021 and 2022.
Mr. Quinn also alluded to the possibility of future layoffs on Tuesday, stating, “There will be no reduction in expenses.”
He added, “We are now contemplating up to $300 million in additional costs for severance in 2023.”
In recent months, central banks around the globe have increased interest rates to curb inflation.
The Bank of England raised UK interest rates to their highest level in fourteen years in December.
The Federal Reserve of the United States and the European Central Bank have also substantially increased interest rates.
This month, British lawmakers questioned whether the nation’s largest institutions passed on higher interest rates to savers.
In response, the chief executives of HSBC, Lloyds, NatWest, and Barclays in the United Kingdom stated that the debate was erroneously centered on the interest rates offered on easy-access savings accounts, which typically yield less than 1 percent.
