By Sinead Cruise
LONDON, Oct 8 (Reuters) – HSBC HSBA.L shareholders face a future of paltry payouts when regulators restore its powers to pay dividends as the bank’s bosses press on with a costly revamp against a backdrop of a global recession and the threat of negative interest rates.
One of the banking sector’s most reliable dividends could be slashed by as much as 50%, analysts and investors say, with HSBC’s management expected to use the economic uncertainty to downgrade shareholder expectations.
Chief Executive Noel Quinn also faces pressure to keep lending to struggling households and businesses while keeping capital in reserve to pay for the bank’s overhaul and cover any bad debts if non-performing loans spike.
In August, Europe’s biggest bank by assets, warned that its bad debt charges for the year could hit $13 billion as the coronavirus pandemic hammered both its retail and corporate customers worldwide.