StockMarketWire.com - Banking giant HSBC resumed its dividend and said it would accelerate its efforts to grow its business Asia.

The bank also reported that annual profit had slumped by 34% in 2020, pressured by higher credit losses and a lower interest rate environment that hurt its loan business.

For the year ended 31 December 2020, pre-tax profit fell 34% to $8.8 billion year-on-year as revenue was down 10% to $50.4 billion.

The decreased in revenue was primarily driven by the progressive impact of lower interest rates across its global businesses, which was partly offset by higher revenue in global markets, the company said.

Net interest margin fell 26 basis points to 1.32%, while expected credit losses increased by $6.1bn to $8.8bn, mainly due to the impact of the Covid-19 outbreak and the forward economic outlook.

Common equity tier 1 ratio, or CET1 ratio, a measure of banking capital, rose 1.2% to 15.9%.

The bank declared an interim dividend for 2020 of $0.15 per ordinary share, and said it would transition toward a target payout ratio of between 40% and 55% of reported earnings per ordinary share from 2022 onward.

Looking ahead, the company said it no longer expected to reach its return on average tangible equity target of between 10% and 12% in 2022, as originally planned and would now target a RoTE of greater than or equal to 10% in the medium term.

The company would also target a CET1 ratio above 14%, in the range of 14% to 14.5% in the medium term and manage this range down in the longer term. Story provided by StockMarketWire.com