HSBC (HSBA)’s reversion to quarterly dividends earlier this year, which has been accompanied by healthy levels of share buybacks, demonstrates the sweet spot that the bank occupies for investors hunting income.
Higher interest rates have facilitated a widening of net interest margins, bringing in more profit, but the less certain economic environment means its attitude to loan growth remains “cautious”. Although customer lending balances increased by $23bn (£18.5bn) in the first six months of this year, this was a technicality – it had to bring accounting for its French retail arm back in-house as a deal to sell the business first agreed two years ago is still nowhere near completion. It also inherited $7bn of loans after rescuing Silicon Valley Bank’s UK operations. Lending otherwise fell, reflecting weaker demand from corporate customers in Hong Kong and Europe.