HSBC could double dividend on strong profitability

Banking giant HSBC's strong profitability could allow the group to "materially" increase its dividend, a City analyst suggests.

Bank of America Merrill Lynch says HSBC could double the size of its dividend from its 2009 low, The Telegraph reports. HSBC's total dividend for 2009 was 34 cents per share, the lowest since 1999. The bank has so far declared 8 cent per share dividends for both first and second quarters of 2010. "We think the rebound in profitability and confirmation of Basel capital requirements will allow the bank to step up its dividend materially," BoA Merrill Lynch analyst Michael Helsby says. Even after factoring in a higher dividend, HSBC would have around $15bn of surplus capital by 2012, ...