A Stocks and Shares ISA is a brilliant way to build a second income stream, from a portfolio of dividend-paying FTSE 100 shares.

Investors may not need the income today, but it doesn’t matter. They can reinvest every shareholder payout back into the stock, to turbo-charge growth. Then draw it as passive income when they retire.

This year’s annual deadline it’s just a few days away, at midnight on 5 April. So investors who want to secure this year’s £20,000 allowance shouldn’t hang around.

Securing the ISA allowance

Investors shouldn’t panic if they aren’t sure which shares to buy though. They can park money in their Stocks and Shares ISA as cash. They’ll earn a spot of interest while making their picks.

They shouldn’t leave it there too long though, money works harder in equities than cash, albeit with more short-term volatility.

Spreading money across a range of dividend stocks reduces risk. Even strong companies can cut their payouts, so diversification helps keep passive income flowing.

To generate £1,200 income from £20k, the ISA would need an average 6% dividend yield. That’s achievable, by building a balanced portfolio around a dozen or so dividend stocks, which could include fund manager Schroders (LSE: SDR). This, coincidentally, yields exactly 6% a year.

Schroders’ a top income stock

Schroders actively manages global investment funds, yet in recent years is own share price hasn’t done particularly well.

It’s down 4% over 12 month,s but lately it’s sprung to life, jumping 15% in the last three months. Even after this rise, the Schroders share price looks decent value, with a price-to-earnings ratio of 13.5, slightly below the FTSE 100 average of around 15 times.

Dividend cover’s a bit thin, at 1.2 times earnings, but it’s expected to rise to 1.4 this year, suggesting greater sustainability. Meanwhile, operating margins are forecast to increase from 21.6% to 25.4%, a positive trend.

Don’t forget the dividends

Schroders does face challenges. The rise of passive index-tracking ETFs has made life harder for traditional fund managers. Volatile markets haven’t helped either.

Full-year results, published 6 March, showed profits falling 3% to £640.5m, amid higher costs and lower performance fees. 

Assets under management rose 4% to £778.8bn though, and statutory pre-tax profits jumped 14% to £558m.

The board also outlined a three-year plan to attract new business and cut costs. It aims to save £150m annually, with £20m already delivered in Q1.

FTSE 100 income star

The 14 analysts covering Schroders produce a one-year price target of 407.4p, implying a 14% increase from today’s price. Throw in the 6% yield would deliver a 20% total return including dividends. Not bad though of course, nothing’s guaranteed.

Well I think Schroders is worth considering for more experienced investors, those less confident should maybe take a look at FTSE 100 income stocks like Aviva, Lloyds Banking Group, British American Tobacco and National Grid. They’ve done better lately.

While the market remains unpredictable, a diversified dividend-focused Stocks and Shares ISA may offer a realistic way to build a high-and-rising second income over time.

It’s certainly a possibility that Aston Martin (LSE:AML) shares may cease to exist in a couple of years. The business is struggling under the weight of its debt repayments and has reported some operational difficulties.

The stock is now down 21% over the last month. And this compounds earlier losses, with the stock falling 69% over 12 months. In other words, a £10,000 investment made a month ago would be worth just £7,900 today.

Management says things will improve

The luxury carmaker’s debt burden has grown substantially, reaching £1.2bn by the end of 2024. This represents a 43% increase from the previous year. Despite a rise in average selling prices to £245,000, overall revenue fell by 3%, driven by a 9% decline in wholesale volumes due to supply chain disruptions and weaker demand in China. 

These financial struggles have forced Aston Martin to cut costs. The Grayson-headquartered company recently announced a 5% reduction in its workforce, aiming for annual savings of £25m, 50% of which will be realised in 2025. However, after reporting a £289.1m loss — up from £239.8m the year before — it’s clear that there’s a lot to do to get this company back in the black.

Management has pinned hopes on its restructuring efforts and new product launches for 2025. The Valhalla, Aston Martin’s first mid-engine plug-in hybrid supercar, is expected to boost sales and reposition the brand in the ultra-luxury market. Aston Martin anticipates mid-single-digit growth in volumes and positive free cash flow in the second half.

However, there are more than a few potholes for Aston to navigate. Trump may slap a 25% tariff on UK carmakers, in what could be a significant blow to an industry that is already struggling.

Experts cast doubt on recovery

I had once been rather bullish on Aston, taking some of its own forecasts at face value. However, things haven’t gone entirely to plan and debt continues to grow at quite the pace.

Analysts forecasts don’t paint a particularly positive picture. The stock isn’t expected to reach positive earnings per share (EPS) in the forecasting period — through 2027. And net income only turns positive in the final year. Meanwhile, analysts see debt reaching £1.35bn in two years.

What’s more, the consensus among analysts is now a Hold. This reflects the broad uncertainty about the company’s future, with just one Buy rating and one Outperform rating. The average share price target — 97% higher than the current price — may be a little misleading.

The bottom line

An investment in Aston Martin today could be highly rewarding. Its peer, Ferrari, trades with incredible earnings multiples, making the prospect of a profitable Aston Martin very enticing. But the risks are substantial and the further dilution of shares is very possible. What’s more, the business has overpromised and under delivered in recent years, and, as a result, may struggle to truly convince investors that a turnaround in on the cards. Momentum counts for a lot. Personally, I’m going to watch from the sidelines. I’m not buying Aston Martin stock anytime soon.

Warren Buffett‘s Berkshire Hathaway (NYSE:BRK.B) stock has surged 16.2% in 2025, outperforming the S&P 500’s 4.6% decline. This performance has caught the attention of investors and market analysts alike, potentially creating additional momentum.

But it’s not only the share price performance that has caught investors eyes. Buffett had been slowly selling some of Berkshire Hathaway’s positions as US stocks surged. This appears to be a very wise move, with the conglomerate’s cash reserve reaching $334bn just as the broad market started to fall.

He’s been here before

Investor confidence in Buffett’s ability to navigate turbulent markets has contributed significantly to Berkshire’s stock performance. The Oracle of Omaha’s long-standing track record of thriving during economic uncertainties continues to attract shareholders.

Buffett’s strategic decision to sell approximately $134bn worth of shares in 2024, including reducing stakes in Apple and Bank of America, has proven prescient, demonstrating his foresight in anticipating market volatility.

Moreover, several stocks in Berkshire’s portfolio have performed exceptionally well in 2025. For instance, BYD, the Chinese electric vehicle maker, has seen its stock surge by 41%. T-Mobile US shares have risen about 21%, while VeriSign’s stock has increased by 23%. Coca-Cola Company, one of Buffett’s long-term holdings, has appreciated by 13%.

A port in stormy waters

Berkshire Hathaway’s diverse portfolio, spanning various sectors (albeit, US focused), has provided stability during market turbulence. This diversification strategy has further cemented the company’s status as a safe haven for investors.

What’s more, the company reported record operating profits of $47.4bn in 2024, a 27% increase from the previous year. This undoubtedly further booster investor confidence in Berkshire’s ability to weather economic storms.

Berkshire Hathaway has been significantly increasing its holdings in U.S. Treasury bills, which has contributed to the company’s resilience and current appeal. In the first half of 2024, Berkshire increased its T-bill holdings by 81%.

It held $234.6bn in short-term US Treasury bills at the end of the second quarter. In fact, Berkshire’s T-bill holdings have grown so large that the company now surpasses the Federal Reserve in short-term Treasury holdings. With yields exceeding 5% in some cases, Buffett’s T-bill holdings could generate around $12bn annually.

The bottom line

With its substantial cash reserves and Buffett’s proven track record, Berkshire Hathaway remains well-positioned to capitalise on future opportunities that may arise from market volatility.

However, two notable risks could temper this outlook. First, Berkshire’s focus on the US economy leaves it vulnerable to domestic economic downturns or prolonged high-interest-rate environments. This could dampen growth in key subsidiaries such as BNSF Railway and GEICO.

Second, the eventual departure of Warren Buffett introduces uncertainty despite a well-laid succession plan. While Greg Abel is widely regarded as a capable successor, any shift in strategy or missteps during the leadership transition could affect investor confidence and Berkshire’s long-term trajectory.

Nonetheless, it’s a stock I’ve been buying for myself and my daughter. The cash and T-bill holdings offer something of a safe haven in an increasingly challenging market.

Stocks listed on the FTSE AIM are exempt from stamp duty. This makes a difference because a typical rate of 0.5% is charged on non-AIM listed stocks. This can significantly impact overall returns, especially for frequent traders or those making large investments.

This tax advantage makes AIM stocks potentially more attractive to investors. It reduces the overall cost of investment and, in theory, may contribute to improved liquidity in these growth-oriented companies.

For investors focused on smaller, potentially high-growth companies, the stamp duty exemption on AIM stocks can be a meaningful factor in their investment strategy and portfolio construction.

What’s more, any gains or dividends made on AIM-listed investments is free from capital gains tax and income tax if purchased through the ISA wrapper. Coincidentally, the deadline for 2024/25 ISA contributions is 5 April. Investments don’t need to be made before this date. However, here’s one stock I think is worth considering.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Unfortunately overlooked

I believe investors often overlook AIM stock Jet2 (LSE:JET2). Even those who know it’s exempt from stamp duty. With a market cap of £2.8bn, it’s the largest company on the AIM index, and ranks 113 in the UK’s largest listed companies by market cap. In other words, its market cap would put it in contention for the FTSE 100 if it were to meet Equity Shares Commercial Companies requirements and join the main market.

However, while the stamp-duty exemption is great, there’s are issues with being AIM-listed, namely, lower visibility and investment potential. For one, companies in the FTSE 100 and FTSE 250 benefit from the automatic investment by index tracking funds. AIM companies simply doesn’t benefit in the same way.

Index tracking funds, which aim to replicate the performance of specific indexes like the FTSE 100 and FTSE 250, cannot include Jet2 in their portfolios. This means the company misses out on the automatic investment that comes with index inclusion. This is a potential limit on its liquidity and share price growth.

Furthermore, many institutional investors and pension funds have mandates that restrict them to investing in main market companies or specific indexes. By being AIM-listed, Jet2 may be overlooked by these large, influential investors, potentially impacting its long-term growth and valuation.

Seriously undervalued

Jet2 appears significantly undervalued to me, despite strong financials. The stock has seen little movement since December 2020, even as peers like International Consolidated Airlines have rallied. A key factor could be its AIM listing, limiting institutional interest. Additionally, Jet2’s lower-margin business model makes it more susceptible to rising costs, including National Insurance and wage increases.

However, the company’s fundamentals remain compelling. With £2.3bn in net cash against a £2.8bn market cap, its enterprise value (EV) is just £600m. The stock trades at 7.1 times forward earnings and an EV-to-EBITDA (earnings before interest, tax, depreciation, and amortisation) ratio of 1.1. That’s vastly cheaper than International Consolidated Airlines and TUI. Fleet expansion plans, aligned with industry capex norms, should enhance efficiency without overburdening finances.

However, with decent earnings growth projected and a net cash balance forecast to hit £2.7bn by 2027, Jet2 remains an overlooked opportunity, in my view. This is why I’ve been gradually topping up my position and may add more. I think it’s a winner.

I’m searching for the best FTSE 100 bargain stocks to buy this month. And International Consolidated Airlines (LSE:IAG) shares have grabbed my attention, the British Airways owner falling 29% in value from February’s record high.

After ‘kicking the tyres’, I’ve decided I’ll steer well clear of the travel giant this ISA season. Here are two major reasons why.

1. Economic gloom

Airlines are highly cyclical companies. When times get tough, luxuries like trips abroad tend to be among the first things to fall when consumers tighten the pursestrings. Business and cargo travel also tends to weaken when economic conditions worsen.

Looking ahead, IAG should be boosted by a (likely) further fall in global interest rates. However, a sharp economic contraction in response to wide-reaching trade tariffs may greatly outweigh any any extra central bank action. Some even believe the chances of a US and UK recession are also sharply rising, two key markets for the company.

IAG’s budget airlines Aer Lingus and Vueling may avoid the worst of the fallout. In fact, demand for their services may pick up if travellers switch to cheaper operators.

But things are largely looking highly uncertain for IAG and the broader travel industry. And especially for transatlantic carriers like British Airways, as alarming comments from rival Virgin Atlantic on Monday (31 March) show.

Chief financial officer Oli Byers said the business enjoyed “very strong trading for the first quarter“. But he added that “we have started to see some signals that US demand has been slowing” over the past few weeks.

2. Falling transatlantic activity

I’m particularly concerned about a sharp cooldown for IAG’s lucrative North American routes. And not just because travellers may switch to cheaper, more local destinations as they feel the pinch.

It’s also due to cultural and political shifts following last November’s election. In other words, ‘Brand USA’ is experiencing the sort of image problems that have sunk Tesla sales in recent weeks (down more than 40% in the European Union in February, for instance).

Early indications suggest the decline in 2025 and beyond could be severe. According to Tourism Economics, inbound travel to the US is tipped to drop 5.5% this year. It had previously been expected to rise 9% from 2024 levels.

Why is this such an issue for IAG? A whopping 30.7% of its capacity (as measured in available seat kilometres (ASKs)) was geared towards North Atlantic routes in 2024.

What’s more, sales growth on these long-haul journeys is considerably higher than elsewhere. Last year, passenger revenue per ASK rose 6.2% in North Atlantic routes. This was double the rate of corresponding growth across the wider group.

Too risky

Following IAG’s recent share price slump, the airline group trades on a forward price-to-earnings (P/E) ratio of 5.5 times. While low compared to the broader FTSE 100, this valuation tellingly reflects the significant and mounting risks the company now faces.

On balance, I’d rather search for other UK value shares to buy.

For many of us, passive income is the holy grail of investing. It gives us hope of working less, spending more time with family and taking some extra holidays. So, what would it take to earn a £2,000 monthly passive income?

The simple maths here might be daunting at first. Even with a 5% yield, an investor would need around £480,000 invested in order to achieve £24,000 annually or £2,000 monthly.

However, this is path well-trodden by thousands of UK investors. And the first part is building a portfolio worth £480,000, ideally within an ISA wrapper to reap the tax-free benefits.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Building a £480k portfolio

Building a £480,000 portfolio is a journey that requires patience, discipline, and a well-crafted strategy. The power of compound interest plays a pivotal role in this endeavour. By leveraging consistent investments and allowing time to work in favour of the portfolio, even modest monthly contributions can grow significantly over the years. Moreover, by maximising the ISA contributions, investors avoid capital gains tax (CGT) on growth and income tax on dividends. This helps preserving returns that would otherwise lose between 8.75% and 39.35% to HMRC.

So, here’s the practical bit. A monthly £500 investment in an S&P 500 ETF (historically 12.5% annual returns) could grow to £480k in 19.5 years. Alternatively, a more cautious portfolio that could include things like mature UK dividend payers, growing at 7% annually, would take 27 years to hit that £480k mark.

Consistency and sensibility

Consistency is paramount. Regular contributions, even during market downturns, often yield better long-term results than attempting to time the market. By maintaining a steady investment pace and allowing time to compound returns, the £480,000 target becomes a more achievable milestone on the path to financial freedom.

A diversified portfolio is essential for balancing growth and income. This might include a mix of low-cost index funds, dividend-paying stocks, and growth-oriented companies. As the portfolio grows, reinvesting dividends can accelerate progress, creating a snowball effect that propels the investor closer to the target.

This trust could help

One investment opportunity to consider that may help achieve the above growth is Scottish Mortgage Investment Trust (LSE:SMT) This investment trust offers investors exposure to a diverse portfolio of high-growth, innovative companies, both public and private. With a focus on disruptive technologies and long-term growth potential, Scottish Mortgage has historically outperformed the FTSE 100, delivering an average annual return of 15% between 2015 and January of this year. That compares favourably to the Footsie’s 6.3%.

The trust’s holdings in tech giants like Nvidia, Amazon, and Meta, alongside private companies such as SpaceX, provide investors with access to cutting-edge sectors and non-listed opportunities. This diversification across dozens of different tech shares and trusts can potentially drive significant long-term growth.

However, investors should be aware of the risks associated with Scottish Mortgage’s use of gearing. While borrowing to invest can amplify returns in positive markets, it can also magnify losses if investments underperform. The trust’s gearing policy allows borrowing up to 30% of its value, which increases potential volatility.

Nonetheless, it’s a trust I believe in. It’s well represented across mine and my daughter’s portfolios. I’ve been topping up.

I like the passive income prospects of a high dividend yield from a quality company. I regard FTSE 100 financial services Legal & General (LSE: LGEN) as a quality company. It has been around for centuries, has a large customer base, and a proven business model. The Legal & General dividend is also something I like a lot. Its 8.8% yield puts the company among the most generous of dividend payers in the blue-chip index.

However, a high yield can be a red flag that the City expects a dividend cut may happen in future and is pricing the share accordingly. The 8.8% Legal & General dividend yield is well over twice the index’s average, which currently stands at 3.5%.

Legal & General has grown its dividend annually in recent years and plans to keep doing so. But it has set out an expectation of lower annual growth in the dividend per share (2% instead of 5%) from this year onwards. What does that mean for me as a shareholder?

I’m planning to hold

The answer may turn out to be: not much.

I plan to hang onto my Legal & General shares as I reckon the dividend yield remains highly attractive. While a slower growth rate is not brilliant news, the yield is already well above average and even low single-digit percentage growth in the dividend per share could make it more attractive still.

The company feels flush enough with cash to be buying back its own shares on a regular basis. Indeed, this month the firm announced plans to spend half a billion pounds buying back its own shares.

Its core operating profit grew last year. But the profit before tax using IFRS accounting standards was more modest, at £542m versus £1.6bn for the core operating profit. Accounting in financial services can be devilishly complicated. That can make it hard for investors to get a very clear picture of how a company is performing at a granular level.

But, while earnings have fallen, Legal & General continues to be profitable and has a proven ability to generate large sums of excess cash. That matters because it is such free cash flows that enable a company to fund its dividends.

Keeping realistic expectations

But while the juicy Legal & General dividend continues to attract me, I also need to keep my enthusiasm grounded in reality.

The share price has soared 51% in five years.

That sounds great but it primarily reflects a slump during the pandemic. Over the past year, the share has dropped 4%.

As the company reduces in size due to asset sales, I think its share price could struggle to move up much, though the plan to buy back its own shares could help in that regard.

The lower dividend growth rate, while still in positive territory, could also be a sign that the company sees potentially lower future business growth prospects than before.

So, I am excited about the dividend potential of my Legal & General shareholding, but am keeping my expectations modest when it comes to share price performance.

I recently bought some shares in baker Greggs (LSE: GRG) at what looked like a tasty price to me. That came about after the company’s full-year results disappointed the City due to signs of sales growth slowing down.

To me, it looked like the results also contained a lot of good news and I reckoned that the share was a potential bargain. Since then, however, what has happened?

The share has fallen even further!

In fact, today (31 March), it hit a new 12-month low. Sure, it is still 15% higher than it was five years ago. But the price is 45% below where it stood as recently as September.

A falling share price could mean that Greggs is now even more of a potential bargain than it was when I invested and I ought to consider buying more shares.

But it could also be a red flag that this is what is known as a value trap.

Some common value trap elements

A value trap is exactly what it sounds like: a share that looks cheap but in fact turns out not to be, as an already low-seeming share price falls further.

Greggs shares at the moment do display some signs commonly seen in value traps.

For one, the valuation looks fairly cheap. Specifically, the price-to-earnings ratio of 12 does not look pricy to me for a well-established, profitable firm with a proven business model.

On top of that, Greggs has done very well in the past, growing its sales and building strong customer loyalty. Many value traps looks cheap because the business has a strong track record of performance. But of course, what has happened before is not necessarily an indicator of what is to come – and a once-mighty company can fall a long way in a short time.

I see a long-term bargain

There are risks for Greggs, to be sure.

Its store-opening programme has added sales volumes, but it costs money to build and fit out shops. As high streets continue to struggle, parts of Greggs’ shop estate could face difficulties in maintaining their current level of customer visits in coming years.

On balance, though, I reckon the company’s best days are likely ahead of it. Its business is simple and benefits from economies of scale that can grow over time, for example, as it opens more centralised production facilities.

Demand for affordable food will remain high for the long term, I reckon. Greggs has developed a unique menu of competitively priced products that help it meet that need. By expanding its business into evening trade, it is able to make better use of existing assets that have historically been more heavily used earlier in the day.

While the City has fretted over lower growth rates, Greggs expects to keep growing — and remains solidly profitable.

To me, Greggs shares do not look like a value trap so much as a potential bargain to hold for the long term. If I have spare cash to invest in April, I will consider buying some more for my portfolio.

Have I taken leave of my senses to consider FTSE 250 builders’ merchant Travis Perkins (LSE: TPK) after what’s happpened? The company has been under the economic cosh.

At Q3 time in October 2024, new CEO Pete Redfern said it was “clear that the group has allowed itself to become distracted and overly internally focused which has led to the underperformance in recent periods“. Then in February 2025 he stepped down due to ill health.

And then the company delayed its 2024 full-year results because its auditor needed more time. I do hope the new release date of 1 April isn’t a bad omen.

Brighter times ahead?

Despite the gloom, the company stuck with its full-year outlook for operating profit at around £135m. The company also said its “key end markets are stabilising with some very early signs of recovery“. But any “growth will be slow and non-linear at the outset“.

Analysts seem cautiously optimistic, though they’re expecting a lofty 2024 price-to-earnings (P/E) ratio of 30. But if the recovery they’re expecting comes off, that could fall to only around nine by 2026.

The home improvement market still looks tough, and I still see this as risky. In fact, a stronger housing market could have a mixed effect on Travis Perkins. It did well from home improvements during the Covid lockdowns that stopped people moving house.

But I see it as a good candidate to consider for investors who go for recoveries.

Retail restructure

WH Smith (LSE: SMWH) is due to release first-half results on 16 April. And though the name is set to disappear from our high streets, it looks like it could be a good investment to consider in our changing retail landscape.

On 28 March, the company announced the sale of its UK high street business to Modella Capital for an enterprise value of £76m. It will now focus on its travel business, which accounted for 75% of revenue and 85% of trading profit in the past financial year.

The WH Smith brand is not included in the deal. So we’ll still see it at airports, railway stations, and other travel outlets. Those who only know the name from the high street might be surprised that there are more than 1,200 WH Smith travel shops spanning 32 countries.

Better value?

I see this as a good move. Forecasts suggest P/E multiples of 11 dropping to around nine over the next few years. But they’ll need reworking after the latest disposal news.

CEO Carl Cowling said: “As we continue to deliver on our strategic ambition to become the leading global travel retailer, this is a pivotal moment for WHSmith as we become a business exclusively focused on Travel.”

A change in stategy can bring risk. And the mere dumping of high street retail might scare some investors away. But it’s a Stocks and Shares ISA possibility for me.

Given the performance of the S&P 500 over the past couple of years relative to the FTSE 100, investors on this side of the pond have been interested. That’s natural, especially as the popular theme of AI has been driven by stocks listed in the US. Yet when it comes to passive income generation, is it the same case, that I should be trying to buy US stocks for the highest potential yield?

Differing perspectives

The first way to answer the question is to look at the average dividend yield for the two leading indexes. The S&P 500’s average yield is 1.21%, and the FTSE 100’s is 3.51%. So, if I simply wanted to buy an index tracker that distributed income, I could make the argument that I should choose the UK option. If I invested £10,000, the monetary difference between the two options over the course of a year would be £230.

However, below the surface, things are more complicated. For example, a portfolio targeting the half-dozen highest-yielding options using S&P 500 stocks would yield 7.03%. For the FTSE 100, the average yield would be 8.61%. Again, the UK would be the better option if someone were trying to implement this strategy.

The movements in the share price need to be taken in account when considering dividend income. Changes in the stock price can either add to the overall profit or negatively affect the dividends. Over the last year, the FTSE 100 has been up 8.6% compared to 6.43% for the S&P 500.

So by looking at three different angles, the UK stock market seems to be more attractive. Of course, there are other ways to look at the two markets, so this isn’t a definitive answer. But I’m happy to invest predominantly this side of the pond for the dividend part of my portfolio.

UK potential

If an investor wants more exposure in this area, HSBC (LSE:HSBA) is one stock to consider. The global bank has a dividend yield of 5.76%, with the share price up 43% over the last year.

The business performed well in 2024, even against the backdrop of a decent 2023. Profit before tax rose by £1.55bn to £25.03bn, despite a decrease in the net interest margin. Reasons for the boost included higher customer activity in the Wealth Management division and more Securities Financing business. It’s true that there was a kick higher from the sale of the Canadian entity, and this was a one-time profit impact that won’t be repeated.

Finances mean that I don’t see the dividend as being under any threat for the coming year. Looking ahead, HSBC is pushing ahead with more expansion in Asia. I see this as a good move, as over half of profits for the group come from this region.

One risk is that net interest income could keep falling this year, as central banks, including the US Federal Reserve, the European Central Bank, and even the Bank of England, are expected to reduce their base rates further. Yet, with careful planning, this risk can be managed.