Lawrence White and Anshuman Daga

SINGAPORE/LONDON –HSBC Holdings (Reuters) reported on Tuesday an increase in annual pretax profits after the Asia-focused bank reversed hefty debt charges. The bank now anticipates that it will achieve a crucial profitability goal a year early.

Pretax profits were $18.9 Billion last year. This is an increase from $8.8 Billion the year before, but still below the average $19.1Billion estimate of 17 analysts compiled by HSBC.

According to the bank, an increase in central bank interest rates worldwide would result in an improvement in its lending margins, which would help it reach its target of a double-digit equity return in 2023. This is one year sooner than anticipated.

HSBC, Europe’s most important bank, has taken advantage of less-than-expected impairment fees as its borrowers benefit from government support packages on markets hit hard by the coronavirus virus pandemic. In addition, a recovery in the economy is supporting businesses.

Noel Quinn (Group Chief Executive) stated in the results statement that “We have strong momentum heading into 2022” and was confident we could continue to execute on our strategy.

Quinn, who ran the bank for the last two years on a continuous basis, is now investing billions of money in wealth management and Asia.

HSBC claimed it released $900 million of cash that it had saved in the event of bad pandemic loans. This was in comparison to $8.8 billion it charged for losses it expected one year prior.

Due in part to China’s downturn in China’s commercial real estate sector, the lender’s fourth quarter performance was marred by a $500M charge for credit losses.

After the completion of a $2 billion buyback program, HSBC stated that it will buy back as much as $1 billion of its shares.