By Lawrence White
LONDON (Reuters) -HSBC has no current plans to sell more assets, its chairman Mark Tucker said on Friday at the annual shareholder meeting of the bank, which has scaled back its presence in Western markets in recent years as part of a sweeping overhaul.
HSBC (LON:HSBA) shareholders met in London days after the bank's CEO Noel Quinn announced his surprise retirement following a five-year tenure which saw HSBC sell retail banking operations in France and the U.S., and its entire Canadian unit, as it pivots towards Asia.
The chairman's comments hint at a likely shift in direction for whomever succeeds Quinn, as the bank turns its focus away from shrinking its global empire to trying to grow its business in its remaining markets.
Shareholders, as expected, backed a resolution to lift a cap on the size of bonuses HSBC can pay its top UK bankers, after Britain axed a policy limiting payouts that it had inherited from the European Union. Goldman Sachs (NYSE:GS) is removing the cap and other banks are expected to follow suit.
Speaking to shareholders at the meeting, Tucker also said HSBC was in a strong position to continue paying robust dividends despite an uncertain global economic outlook and central bank policy moves.
The bank, which returned $19 billion to shareholders in 2023 through dividends and share buybacks, has announced a further $8.8 billion so far for 2024, and is targeting a dividend payout ratio of 50% this year, Tucker said.
HSBC has been able to splash out on such shareholder rewards in recent years as rising central bank interest rates have boosted its lending income, turbo-charging its profits.
Inflation remains key to the global interest rate outlook, Tucker said. HSBC economists forecast that global inflation will fall gradually to 5.8% in 2024 and 3.8% in 2025, having climbed as high as 6.3% in 2023.
The bank expects the European Central Bank and Bank of England to cut rates in June, both lowering by 150 basis points by the end of 2025, and expects the U.S. Federal Reserve to cut in September, cutting by 100 basis points by the same time.