HSBC H1 PROFIT BEATS ES­TI­MATES

Europe’s big­gest bank also an­nounces US$2b share buy­back, its third in past year

New Straits Times - - Business -

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.

AFP PIC

HSBC Hold­ings Plc says 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.

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