HSBC shares rise on $3 bn buyback; flat first-half profit beats estimates

HSBC Holdings pledged to buy back $3 billion in shares on Wednesday, in a fresh attempt to boost a flagging stock price, after reporting stable first-half profit driven by growth in wealth management and narrowing loss in Chinese real estate.

Wealth revenue reached $4.3 billion for January-June, 12% more than the same period of 2023, driven by increased investment distribution and private banking income, as well as growth in asset management and life insurance.
 

"We are confident that we have the right strategy and model to grow revenue, even in a lower interest rate environment," Chief Executive Noel Quinn said in a press release.
 

 

Europe's largest bank forecast its return on average tangible equity - a performance target - to be in the mid-teens in 2025, matching its estimate for 2024.
 

The Asia-focused bank also announced a new share buyback cycle of $3 billion, on top of a $5 billion buyback programme announced earlier this year.
 

Its Hong Kong-listed shares rose more than 3% after the earnings results.
 

For the first six months this year, HSBC said pretax profit fell 0.4% to $21.6 billion, versus last year's $21.7 billion.
 

The result compared with the $20.5 billion average of broker estimates compiled by HSBC.

New Clients surge, China loss narrow

The UK-headquartered, Asia-focused lender highlighted its commitment to both London and Hong Kong, pointing out an 8% rise in international customer numbers to 2.7 million in January-June, with 345,000 new-to-bank account openings in Hong Kong.
 

The lender, which booked a $3 billion writedown last year, also saw signs of relief from a slowing economy and worsening property sector in China.
 

Overall, in minor tweaks to guidance, HSBC estimated credit loss would fall into a 30 to 40 basis point range for the full year, from around 40 basis points a year prior.
 

It also upgraded its net interest income view to around $43 billion from $41 billion.
 

Operating expenses increased around 5% on year to $16.3 billion in the first half due to increased spending on technology, inflationary pressure and change in the timing of bonus payments.
 

The bank also named Jonathan Bingham as interim group chief financial officer, effective Sept. 2, two weeks after the 160-year-old bank appointed finance head Georges Elhedery as its new chief executive officer.
 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)