HSBC profits up in first half of 2017

HONG KONG: HSBC said profits were up yesterday in the first half of the year in what it called an ‘excellent’ result after a turbulent 2016.

The Asia-focused giant has been on a recovery drive over the past two years to streamline the business and slash costs, and has laid off tens of thousands of staff.

Reported pre-tax profit for the six months to June rose five per cent to US$10.2 billion compared with US$ 9.7 billion for the same period last year.

HSBC also announced a share buyback of up to US$ 2 billion, expected to be completed in the second half of the year.

Shares were up 2.77 per cent at HK$ 78.55 ( US$10.06) in early afternoon trading in Hong Kong Monday.

The half-year results showed operating expenses dropped 12 per cent to $16.4 billion, partly stemming from a sell- off of its Brazil operations.

Chairman Douglas Fl int described the performance as “extremely pleasing”.

Flint said there were still uncertainties due to increasing geopolit ical tensions and “ambiguous predictions” around Britain’s future relationship with the European Union postBrexit, but described HSBC’s performance as resilient.

Analysts said the results had outstripped predictions.

“HSBC’s earnings are definitely better than market expectations,” said Dickie Wong of Hong Kong-based Kingston Securities.

He described the firm as in “very good shape” after wide- ranging restructuring programmes fol lowing the global financial crisis in 2008.

Net profit for the first half of the year rose 10 per cent to US$ 6.99 billion from US$ 6.36 billion for the same period in 2016.

Pre-tax profits for the second quarter rose US$1.7 billion to US$ 5.3 billion year on year, beating Bloomberg analysts’ estimates, which had averaged out at a US$ 4.6 billion forecast.

HSBC announc ed the appointment of a new chairman in March as part of a management overhaul that will also see it choose a new chief executive to replace Stuart Gulliver, following a massive drop in 2016 profits.

British businessman Mark Tucker, currently group chief executive and president of insurance group AIA, will take over from Flint in October.

Gulliver has said he will step down in 2018. — AFP