Belfast Telegraph

HSBC profits hit £7.8bn as buyback of shares pledged

By Ravender Sembhy

HSBC has reported a rise in half-year profit and announced a $2bn (£1.5bn) share buyback.

The banking giant said pre-tax profit rose 5% to $10.2bn (£7.8bn) in the first six months of the year, ahead of expectations, as the lender hailed a strong performance across its main divisions.

Reported revenue came in at $26.2bn (£19.9bn), down 12%.

News of the share buyback spurred on HSBC's London shares, which rose nearly 2% in midday trading.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The market has reacted positively, mainly because it likes the smell of $2bn of cash heading back to investors from a share buyback scheme taking place in the second half of this year."

Outgoing chairman Douglas Flint and chief executive Stuart Gulliver have been attempting to reinvigorate the bank since the financial crisis, after which it faced a series of misconduct issues.

Mr Flint said: "Markets-based revenues benefited from market share advances, commercial banking customer activity was robust, wealth management and insurance revenues were notably stronger in Hong Kong, and credit experience globally remained remarkably sound.

"As central bank interest rates edged higher, led by the US, we began to benefit from improved margins on our core deposit bases, providing a welcome enhancement to the group's revenue mix, given the likely trajectory of interest rates over the medium term."

Mr Gulliver has overseen stringent job cuts and asset sales as part of efforts to boost profits, and on Monday said the bank is on track to achieve around $6bn cost savings by the end of the year.

HSBC also booked a $300m (£228m) charge linked to the mis-selling of payment protection insurance (PPI).

It comes after Lloyds and Barclays also revealed big hits last week.

HSBC is one of a number of banks considering relocating jobs to the continent after the Brexit vote, having said that 1,000 jobs may have to move from London to Paris over the next two years, depending on the outcome of negotiations.

Mr Flint described the UK's Brexit talks as "complex and time-consuming".

He added: "The essential questions that have to be addressed are whether, at the conclusion of the negotiations, the economies of Europe will continue to have access to at least the same amount of financing capacity and related risk management services, and as readily available and similarly priced, as they have enjoyed with the UK as part of the EU."

Belfast Telegraph