In this file photo taken on Aug 3, 2020, a HSBC logo is pictured on a wall outside a branch of the bank in central London. (DANIEL LEAL / AFP)

SINGAPORE/LONDON – HSBC brought forward its key profitability target by a year and more than doubled its annual profits as expected bad loans from the COVID-19 pandemic failed to materialize and it looked forward to rising interest rates lifting its income.

Like global peers, HSBC, one of Europe's largest banks, is taking advantage of lower-than-expected impairment charges as its borrowers reap the benefit of government support packages in markets hit by the coronavirus pandemic, while a recovery in economies is also supporting firms

Like global peers, HSBC, one of Europe's largest banks, is taking advantage of lower-than-expected impairment charges as its borrowers reap the benefit of government support packages in markets hit by the coronavirus pandemic, while a recovery in economies is also supporting firms.

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The lender reported pretax profits of $18.9 billion last year, up from the previous year's $8.8 billion but just below the $19.1 billion average of 17 analyst estimates compiled by HSBC itself. Asia contributed 65 percent of the profit.

HSBC's Hong Kong-listed shares shed 3.2 percent in afternoon trade on Tuesday, in line with falls in the broader market as global stocks tumbled after the Ukraine crisis deepened.

"We have good momentum coming into 2022 and are confident that we can continue to execute against our strategy," Group Chief Executive Noel Quinn said in the results statement.

HSBC said it would buy back up to $1 billion of its own shares, after the conclusion of an existing $2 billion buyback program.

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It said that if central bank interest rates rise worldwide as expected, the resulting improvement in its lending margins would mean it hits its goal of a double-digit return on equity in 2023, a year earlier than expected.

Quinn, who has run the bank on a permanent basis for the past two years, has doubled down on Asia and is investing billions of dollars in the lucrative wealth management business.

HSBC said it expects a weaker performance in its wealth management in Asia in the first quarter of 2022.

HSBC's London-listed shares have gained 29 percent over the past one year compared with a 16 percent rise in StanChart and a 25 percent surge in Barclays.

The results from the London-headquartered bank come after Standard Chartered raised its core profitability goals as it bets on inflation-battling rate increases to boost lending. 

The bank reported revenue slipped 2 percent in 2021 due to low global interest rates and falling income in its markets business, but said rising rates policies this year and beyond should help to reverse the decline.

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"After absorbing the impact of low interest rates for some time, we believe we have turned the corner on revenue," Quinn said.

HSBC said it released $900 million in cash it had put aside in case pandemic-related bad loans spiked, as opposed to the same time a year earlier when it took a charge of $8.8 billion against expected losses.