HSBC's first-half pretax profit jumped 23% to $19.5 billion, beating analyst forecasts, and the bank announced a new $1 billion share buyback. Stronger lending and wealth management revenue pushed HSBC to raise its net interest income guidance for the year.
HSBC posted a pretax profit of $19.5 billion for the first six months of the year, up 23% from $15.8 billion a year earlier and ahead of the $18.9 billion analysts had forecast. The bank credited revenue growth in lending and wealth management fee earnings, backed by robust money flows.
Asia overhaul drives fee income
Europe's largest bank pointed to the payoff of its Asian focus, where an overhaul targeting wealth and cross-border banking drove fee income growth alongside a favourable rate backdrop. Wealth revenue in the first half grew 18% from a year ago, backed by strong growth from its Asian markets.
CEO Georges Elhedery continued his strategy of streamlining the lender by exiting markets where it lacks scale. The bank sold its Singapore insurance, Egypt retail banking and Australian mortgage businesses during the period.
Buyback resumes, guidance raised
HSBC lifted its guidance for net interest income for this year, saying it now expects to exceed $46 billion, having previously said it would hit that level. The lender also announced a resumption of its share buybacks with an up to $1 billion plan, the first since it announced late last year it was taking smaller Hong Kong lender Hang Seng Bank private.
It also set a second interim dividend of $0.1 per share, following a $0.1 payout in May. The bank's Hong Kong-listed shares gained 0.8% to HK$169.5 after the earnings release, hitting a new high.
The result caps a strong earnings season for Europe's big banks, which have extended a more than two-year-long recovery thanks to a surge in trading activity and resilient interest income despite dips in central bank rates. Rival Standard Chartered also announced a forecast-beating first-half profit last week, powered by a push for fee income.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
