Europe Movers: Glencore, HSBC, Rio Tinto

Inga Muller
21 Feb, 2024
Frankfurt

Benchmark indexes in Paris and Frankfurt traded higher, but they declined in London as investors awaited the release of the latest policy meeting minutes from the European Central Bank and the Federal Reserve. 

The DAX index increased by 0.2% to 17,110.15, the CAC-40 index rose 0.2% to 7,812.65, and the FTSE 100 index inched lower by 0.9% to 7,651.08.

The yield on 10-year German bonds edged up to 2.39%; French bonds inched higher to 2.87%; the UK gilts edged higher to 4.07%; and Italian bonds inched higher to 3.87%.

HSBC Holdings declined 7.6% to 594.40 pence, despite the UK-based and China-focused global bank reporting a sharp jump in profit and announcing a stock buyback program. 

The bank reported a 56% surge in its annual profit in 2023 to $22.43 billion from $14.83 billion, and income per share increased to $1.15 from 72 cents a year ago, respectively. 

Revenue in 2023 rose 30% to $66.1 billion, driven by a $5.4 billion increase in net interest income and a $10.0 billion increase in non-interest income. 

The net interest margin increased by 24 basis points to 1.66%, with $3.4 billion in expected credit losses and other impairment charges.

The bank announced a new $2 billion stock repurchase plan and hiked its full-year dividend to 61 U.S. cents from 32 U.S. cents a year ago. 

Revenue in the fourth quarter declined 11% to $13 billion after the company reclassified its retail operation in France as "held of sale," and after-tax profit dropped by $4 billion to $0.2 billion. 

The bank took an impairment charge of $3.0 billion related to its Shanghai, China-based BoCom. 

Rio Tinto declined 1.8% to 5,176.0 pence after the Australia-focused mining company reported a decline in its profit. 

Consolidated revenue in 2023 declined to $54.0 billion from $55.6 billion, net income dropped to $10.1 billion from $12.4 billion, and diluted earnings per share fell to $6.16 from $7.60 a year ago. 

Iron ore segment revenue increased to $32.2 billion from $30.9 billion, and aluminum segment revenue edged higher to $12.3 billion from $14.1 billion a year ago, respectively. 

Glencore dropped 3.7% to 377.70 pence after the mining company reported a sharp decline in its annual profit. 

Revenue in 2023 declined 15% to $217.8 billion from $255.98 billion, net income attributable to shareholders plunged 75% to $4.3 billion from $17.3 billion, and basic earnings per share dropped 74% to 34 cents from $1.33 a year ago. 

Earnings in 2023 declined sharply, reflecting impairment charges linked to the company's zinc and cobalt asset revaluations and sharply lower coal prices. 

The company proposed a cash dividend of 13 cents per share.