HSBC says outlook for interest rate income 'remains positive'
HSBC said in its first quarter results that it expects net interest income of at least $34bn (£27.2bn) in 2023 after its profits were boosted by the surge in global interest rates.
Its statement said: "While the interest rate outlook remains positive, we expect continued pressure from increased migration to term deposits as interest rates rise."
As first quarter profits surged by more than $4bn (£3.2bn), group chief executive Noel Quinn said:
Our strong first quarter performance provides further evidence that our strategy is working.
Our profits were spread across out major geographies and all three global business performed well as we continued to meet our customers' needs through our internationally connected franchises.
With the good momentum we have in our business, we expect to have substantial future distribution capacity for dividends and share buy-backs.
Good morning
HSBC's pre-tax profits soared by more than $4bn (£3.2bn) in the first three months of the year as it was given a $1.5bn (£1.2bn) boost from its acquisition of Silicon Valley Bank's UK arm in March for £1.
The deal helped the bank's pre-tax profits soar by more than $4bn (£3.2bn) as it announced its first dividend of 10 cents per share since before the pandemic in 2019, as well as a share buy-back of up to $2bn (£1.6bn).
Its results come a day after it emerged First Republic Bank will be sold to JP Morgan after becoming the third major US lender to fall in two months.
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What happened overnight
Markets were positioned for Australia's central bank to stay on hold and a 25 basis point hike sent the Aussie dollar up about 0.8pc to its highest in a week at $0.6692.
Three-year Aussie government bond yields also jumped, while Australian stocks slipped 0.7pc.
Elsewhere there were jitters at short tenors in the US Treasury market as the government's borrowing ceiling looms, and MSCI's broadest index of Asia-Pacific shares outside Japan was flat.
Mainland China markets were closed. Japan's Nikkei hit a 16-month high, before backing off slightly, with the bank sector a drag.
Wall Street stocks ended slightly lower on Monday after JPMorgan Chase acquired the embattled First Republic Bank, as markets traded cautiously ahead of a Federal Reserve decision.
The S&P 500 fell less than 0.1pc to 4,167.87. The Dow Jones Industrial Average dropped 0.1pc to 34,051.70. The Nasdaq composite fell 0.1pc to 12,212.60.
Treasury yields rose amid firming expectations for the Federal Reserve to raise rates again later this week. The yield on 10-year Treasuries advanced 13 basis points to 3.55pc.