HSBC leads as world’s largest dividend payer in Q2 2024

HSBC Holdings emerged as the world’s largest dividend payer for the second quarter of 2024, according to the latest Janus Henderson Investors Global Dividend Index. Europe and Hong Kong’s largest bank distributed US$11.7 billion, boosted by a US$4 billion special dividend from the sale of its Canadian unit. This special dividend accounted for almost a third of the global total in that period.

HSBC’s dividend payout hike came after demands from its largest shareholder, Ping An Asset Management, which pushed for the bank to improve its dividend last year. Some Hong Kong shareholders, backed by Ping An, were seeking a return to pre-pandemic dividend levels, when 51 cents per share were distributed. The bank had cancelled its fourth-quarter 2019 dividend and 2020 payouts due to demands from UK regulators in the context of the pandemic.

In 2023, HSBC set an annual dividend of 61 cents per share, its highest payout since 2008, with a forecast of 71 cents per share for this year, according to Morningstar. In the global dividend ranking, HSBC beat out giants such as Nestlé, China Mobile and Mercedes Benz Group.

The Asia-Pacific region excluding Japan showed moderate dividend growth, up 1.1% to US$39.5 billion, while global dividends hit a record US$606.1 billion, up 8.2%. Growth in the region was hit by significant cuts at companies such as Cosco.

Despite slower growth in Australia and Hong Kong, the outlook for Asia is optimistic, with government policies seeking to incentivise dividend payouts. According to Sat Duhra, Asia dividend income portfolio manager at Janus Henderson, some Asian governments are starting to focus on long-term dividend growth. In China, government-led reforms such as the nine-point plan to improve investor returns and state-owned enterprise reforms have boosted dividends by 37.4% in the second quarter, reaching US$6.3 billion.

Taiwan and Singapore also recorded double-digit growth in their dividend payments, with Taiwan Semiconductor Manufacturing (TSMC) and DBS Group contributing significantly in their respective countries. Janus Henderson forecasts global dividend payments to rise 6.4% in 2024, reaching US$1.74 trillion.