By Simon Clark and Quentin Webb
HSBC Holdings PLC, one of the world's largest banks, said it would pour about $6 billion of extra investment into Asia in the next five years, as it doubles down on its core business.
The London-based bank, which makes most of its profit in Hong Kong and mainland China, said Tuesday that earnings fell 35% to $3.9 billion last year as the coronavirus pandemic roiled the global economy. HSBC set aside $8.82 billion in provisions for bad loans last year versus less than $3 billion in 2019.
Chief Executive Noel Quinn is leading the reorganization of the bank. Geopolitical tension between China and Western countries has strained his ambition for the bank to be a financial bridge between the most populous nation and the rest of the world. HSBC last year supported China's imposition of a national security law in Hong Kong, which the U.S. and British governments opposed.
"We plan to focus on and invest in the areas in which we are strongest," Mr. Quinn said. In a presentation to investors, the bank said it would invest an additional $6 billion in its wealth-management and international wholesale businesses to drive growth in Asia. HSBC will also spend more to digitize faster and said it planned to build on its strengths in sustainable finance.
The bank reported a return on tangible equity of 3.1%, down from 8.4% a year earlier, and dropped its previous goal of reaching a 10% to 12% return on this basis by 2022. Instead, it will target a return of 10% or more in the medium term.
Write to Simon Clark at firstname.lastname@example.org and Quentin Webb at email@example.com
Corrections & Amplifications
This item was corrected on March 4, 2021 to reflect that HSBC will spend more to digitize faster. The original version incorrectly misspelled the bank as HBSC in the headline and one instance of the story.
(END) Dow Jones Newswires
February 23, 2021 00:12 ET (05:12 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.