HSBC launches $1 billion share buyback after profits surge by 23 per cent

HSBC launches billion share buyback after profits surge by 23 per cent

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HSBC has reported a 23 per cent surge in pre-tax profits for the first half of the year, with interim results revealing a 3.7 billion dollar (£2.75 billion) rise in profit before tax to 19.5 billion dollars (£14.5 billion) compared with the same period last year.

The bank attributed this growth to higher net interest income and increased fee income, particularly from wealth management and banking services.

These gains were partially offset by higher expected credit losses and increased operating expenses.

HSBC also announced it would resume share buybacks, planning to repurchase up to $1 billion (£744.8 million) – the first since the Hang Seng Bank privatisation in October.

HSBC also set a second interim dividend of $0.1 per share, following a $0.1 ⁠payout in May. The bank’s Hong Kong-listed shares gained 0.8 per cent to HK$169.5 after the earnings release, hitting a new high.

The bank attributed this growth to higher net interest income and increased fee income, particularly from wealth management and banking services (PA Archive)

Group chief executive Georges Elhedery said: “HSBC is becoming the stronger bank we set out to build. We are executing our strategic priorities with pace, precision and discipline.

“This is allowing our four businesses to focus on their core strengths, grow, work together more effectively and deepen customer relationships. The result is a bank capable of achieving more.”

HSBC’s solid performance reflects the payoff of its Asian focus, where an overhaul targeting wealth and cross-border banking drove fee income growth alongside a favourable rate backdrop.

It also caps a strong earnings season for Europe’s big banks, which have extended a more than two-year-long recovery thanks to a surge in trading activity and resilient interest income despite dips in central bank rates.

HSBC lifted its guidance for net interest income for this year, saying it now expects to exceed $46 billion, having previously ‌said it ⁠would hit that level.

The half-year update from HSBC showed CEO Georges Elhedery continuing his strategy of streamlining the lender ⁠by exiting markets where it lacks scale, as the bank sold its Singapore insurance, Egypt retail banking and Australian mortgage businesses.

Wealth revenue in the first half grew 18 per cent from ⁠a year ago, backed by strong growth from its Asian markets.