HSBC profit more than doubles as economies rebound, loan-loss fears ebb

HSBC profit more than doubles as economies rebound, loan-loss fears ebb
Pedestrians walk past the logo for HSBC outside a local branch bank in Hong Kong on August 2, 2021. (AFP)
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Updated 02 August 2021

HSBC profit more than doubles as economies rebound, loan-loss fears ebb

HSBC profit more than doubles as economies rebound, loan-loss fears ebb
  • HSBC reinstated dividend and released $700 million set aside for bad loans
  • Pretax profit was $10.8 billion versus $4.32 billion a year earlier

HONG KONG/LONDON: HSBC Holdings on Monday reported forecast-beating first-half pretax profit that more than doubled from a weak performance last year when it made huge provisions for pandemic-related bad loans.
Encouraged by an economic rebound in Hong Kong and Britain, its two biggest markets, HSBC reinstated dividend payments and released $700 million that had been set aside to cover potential bad loans. That compares with $6.9 billion in loan-loss provisions made in the same period a year ago.
Pretax profit for Europe’s biggest bank by assets came in at $10.8 billion versus $4.32 billion in the same period a year earlier and was higher than the $9.45 billion average of 15 analysts’ estimates compiled by the bank.
Revenue, however, fell 4 percent due to the low interest rate environment.
HSBC said given the brighter outlook globally as economies recover better than expected from the pandemic, it expects credit losses to be below its medium-term forecast of 0.3 percent-0.4 percent of its loans.
The bank also said that for the year, it could even make a net release of funds from earlier provisions rather than add to them, but it was hard to say definitely due to the unknown impact of government support programs, vaccine rollouts and new strains of the virus.
It plans to pay an interim dividend of seven cents a share after the Bank of England scrapped payout curbs last month.
Reflecting its better than expected loan performance, HSBC will move to within its target payout range of 40-55 percent of reported earnings per share within 2021, it added.


Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO

Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO
Image: Shutterstock
Updated 18 sec ago

Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO

Bahrain’s Investcorp set to be a $100bn company in 7 years: CEO
  • Although America continues to be their biggest market, Asia is going to be very important in the future Investcorp
  • The company is currently pursuing a five-year growth plan

Bahrani investment company Investcorp has ambitious plans to be a 100-billion-dollar company in seven years, its chief Mohammed Al-Ardhi said, saying the company is currently valued at nearly $40 billion.

“We believe in about seven years we can get there [through] acquisitions, organic growth, joint ventures, [these] are things that we have done and we will continue to do,” he said in an interview with Bloomberg.

“We operate in America, North America and Europe, in the Gulf and in Asia. America and Europe are 80 percent of our markets at the moment,” Al-Ardhi added.

The company is currently pursuing a five-year growth plan.

“Obviously it is about changing our model for many years. We have served the retail investors in the deal-by-deal model. We would like to change that. So, we target sustainable capital, institutional capital,” he said.

“The structure of going private (delisting) is the right thing for us to do now as we prepare the company for the next stage of its growth,” he added.

Al-Ardhi added although America continues to be their biggest market, Asia is going to be very important in the future Investcorp.

“The growth that is happening on the scale that it is happening there is just something you cannot ignore. We started our businesses in India two years ago and in China, we have offices in both of these countries and in Singapore. In China, we have concentrated on the consumer, on technology, on food. In India, we have concentrated financial services on the consumers and health care,” he said.

“We see a lot of growth there and we see a lot of appetite of our investors to actually -whether retail or institutional- to get the opportunities that we can bring in India and China and Southeast Asia,” Al-Ardhi added.


Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund

Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund
Updated 19 min 48 sec ago

Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund

Jadwa Investment eyes luxury Riyadh complex through new $98m REIT fund
  • The Riyadh development consists of high-end office spaces, as well as a retail space with a hotel and a gym.
  • The offering is expected to raise equity of SR370 million ($98.6 million)

DUBAI: Advisory firm Jadwa Investment has launched the second offering of its real estate investment trust (REIT) Saudi fund to acquire a luxury retail and office complex in Riyadh.

The offering is expected to raise equity of SR370 million ($98.6 million), which will be used to purchase “The Boulevard.”

The Riyadh development consists of high-end office spaces, as well as a retail space with a hotel and a gym.

Once acquired, the complex will become one of the fund’s flagship properties, representing 13.4 percent of its assets. It is expected to generate a net rental income of SR29.6 million annually.

“We are pleased to offer our existing and potential clients the opportunity to invest in Jadwa REIT Saudi at an attractive price and to gain exposure to prime real estate assets across Saudi Arabia,” Tariq Al-Sudairy, chief executive officer and managing director of Jadwa Investment, said.

The Jadwa REIT Saudi Fund is a closed-end, Shariah-compliant fund with a term of 99 years and total gross assets value of SR2.19 billion.

The acquisition will push the fund’s assets by 16.9 percent to SR2.56 billion.


Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO

Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO
Updated 21 min 57 sec ago

Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO

Saudi builder Arriyadh Development appoints PIF exec Jihad Al-Qadi as CEO
  • The Tadawul-listed company is involved in a number of public service projects
  • He holds more than 18 years of experience in the financial and investment sector

DUBAI: Saudi developer Arriyadh Development Company (ARDCO) has appointed Jihad bin Abdul Rahman Al-Qadi as its new chief executive officer.

The Tadawul-listed company is involved in a number of public service projects, including building, operating, and managing transportation centers and public markets.

Newly appointed Al-Qadi will assume the position in December, the company said in a stock exchange filing.

He holds more than 18 years of experience in the financial and investment sector. He has also worked in the treasury sector of the National Bank of Saudi Arabia, Jadwa Investment Co., and the Saudi Economic and Development Co.

He previously worked at the Public Investment Fund, where he was the director of real estate asset management and director of institutional development.

Al-Qadi is a member of a number of boards of directors, including that of the Islamic Development Bank Fund for Infrastructure, and the Saudi Economic Association.

The appointment is part of the company’s ongoing plans to boost value for its shareholders.


Saudi-government Kafalah grants $115m in loans to female-led enterprises

Saudi-government Kafalah grants $115m in loans to female-led enterprises
Image: Shutterstock
Updated 26 September 2021

Saudi-government Kafalah grants $115m in loans to female-led enterprises

Saudi-government Kafalah grants $115m in loans to female-led enterprises
  • Businesses in the central region of Riyadh got the lion's share as they received the highest Kafalah support
  • The Kafalah program spans several business sectors

The Small and Medium Enterprises Loan Guarantee Program (Kafalah), a government initiative to finance small and medium enterprises, granted SR432 million ($115 million) of loans to 456 businesses led by women in the first half of 2021, according to Al-Eqtisadiah newspaper.


Businesses in the central region of Riyadh got the lion's share as they received the highest Kafalah support, with 151 establishments accounting for 33 percent of the total, taking SR178 million in financing. This was followed closely by Makkah region with 115 establishments, or 25 percent, receiving SR97 million. The Eastern Province came third, with 102 establishments, or 22 percent, receiving SR99 million.


The Kafalah program spans several business sectors including wholesale commerce, catering and hotels, manufacturing industries, and administrative and support services.


Dubai’s Amanat sells stake in Jeddah IMC hospital for $118m

IMC image: celebration of the 5th Anniversary of the pledge of allegiance
Updated 26 September 2021

Dubai’s Amanat sells stake in Jeddah IMC hospital for $118m

IMC image: celebration of the 5th Anniversary of the pledge of allegiance
  • The divestment resulted in a cash return of 100 million dirhams
  • The move is part of the Dubai firm’s strategy to exit minority investments, and pursue more specialized opportunities in health and education

DUBAI: Dubai-based investment firm Amanat Holdings has completed the sale of its minority 13.13 percent share in Jeddah hospital International Medical Center (IMC) for SR443 million ($118 million).

The transaction was done through the Saudi Healthcare and Education fund, which is indirectly owned by Amanat through its subsidiaries.

The divestment resulted in a cash return of 100 million dirhams, and is expected to report a gain of 40 million dirhams, Amanat said in a statement.

“IMC has a unique market position in Saudi Arabia and is a reputable provider of quality healthcare. We invested through the Fund in IMC nearly five years ago, with a different vision to obtain exposure across recognized assets through minority stakes,” Hamad Alshamsi, Amanat chairman, said.

The move is part of the Dubai firm’s strategy to exit minority investments, and pursue more specialized opportunities in health and education.

IMC is a 300-bed multi-disciplinary tertiary care hospital that serves the Kingdom’s western region.