HSBC H1 PROFIT BEATS ESTIMATES
Europe’s biggest bank also announces US$2b share buyback, its third in past year
HSBC Holdings Plc said yesterday profit rose five per cent in the first half of the year, beating analyst estimates, and announced its third share buyback in the past year on the back of a growing capital base.
Pretax profit reached US$10.2 billion (RM43.66 billion) in the six months through June, from US$9.7 billion in the same period a year earlier, said HSBC in a statement. The result compared with the US$9.5 billion average estimate of analysts polled by the bank.
HSBC also announced an up to US$2 billion share buyback, as it uses excess capital to offset the dilutive effect of shares paid out as dividends. It completed a previously announced US$1 billion buyback in April.
Europe’s biggest bank said it expected to commence the latest buyback shortly for completion in the second half of this year.
The announcement takes the total of HSBC share buybacks since the second half of last year to US$5.5 billion.
HSBC, like many global banks, spent the years up to the 2008 financial crisis building its empire. Recent years have seen it cut jobs and sell assets worldwide to shrink the group back to profitability and maintain dividend payouts in an era of stricter banking regulations.
“In the past 12 months we have paid more in dividends than any other European or American bank and returned US$3.5 billion to shareholders through share buybacks,” said chief executive officer Stuart Gulliver in HSBC’s earnings statement.
“We have done this while strengthening one of the most resilient capital ratios in the industry.”
HSBC’s dividends totalled US$10.1 billion last year, US$10 billion in 2015 and US$9.6 billion in 2014.
The bank, which makes over half of its profit in Asia — the bulk in Hong Kong and China — said pretax profit in Asia rose seven per cent in the first half to US$7.6 billion, mainly helped by stronger wealth management and insurance revenue in Hong Kong.
“We continue to shift the group’s business mix towards Asia, building on our improved financial performance and strong customer acquisition in the region since June 2015,” said Gulliver.