HSBC Says IFRS 17 Implies Lower 2023 Net Interest Income Guidance, 1st Half 2022 Figures

By Elena Vardon

HSBC Holdings PLC on Thursday said its net interest income guidance for 2023 is expected to be lower under the IFRS 17 accounting standard, which it said will only change the timing of profit recognition.

The British bank sees net interest income $2.3 billion lower than its equivalent guidance on an IFRS 4 basis and said it expects minimal impact on other key financial targets and banks.

The lender said that if IFRS 17 was applied to the results for the six months to June 30, 2022, which were reported on an IFRS 4 basis, group pretax profit would have been down $400 million with revenue $700 million lower, of which net interest income down $1.1 billion and non-interest income up $400 million. Costs would have been down $300 million, it said.

It added that across the group and insurance business, it doesn't expect any impact from the change to IFRS on its regulatory capital or solvency position, the lifetime expected profit of insurance contracts, or dividend and cash generation.

The bank said its group total equity at Jan. 1, 2022, is estimated to reduce by $10.5 billion and tangible equity by $2.4 billion under the new accounting standards.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

March 09, 2023 03:31 ET (08:31 GMT)

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