£1.5bn share buyback for HSBC despite falling profit
HSBC yesterday announced a £1.5bn share buyback alongside a surprise drop in firstquarter profits.
The banking group’s profit slipped 4pc in the period to £3.5bn, largely due to a hike in operating expenses. Costs related to business investment and enhancing its online business rose 13pc, which outstripped revenue growth. HSBC also said it will shortly commence its latest share buyback, following £ 4bn worth of share repurchases the lender has carried out over the last two years.
Chief executive John Flint, who took over in February, said that HSBC is benefiting from interest rate hikes and economic growth, particularly in Asia.
He said that the bank’s ‘primary focus is to grow the businesses safely, and we have increased investment to deliver that aim’.
Charlie Huggins, manager of the Hargreaves Lansdown Select UK Income Shares fund – which holds HSBC shares – said: ‘The increased investment for growth suggests that management are feeling more confident in their prospects.’
He added: ‘HSBC’s vision is to become the premier bank for facilitating business between China and the rest of the world.’ Shares fell 2pc, or 1.03p, to 48.81p.