HSBC sets aside US$3 billion for buy-back as result beats estimates in tribute to retiring CEO

HSBC, the biggest of Hong Kong’s three currency-issuing banks, announced a new round of share buy-backs after its second-quarter defied naysayers with a smaller-than-expected drop, bookending the tenure of its chief executive Noel Quinn.

The London-based bank, which earns most of its revenue in Asia, set aside another US$3 billion to buy back its own shares after completing the previous US$3 billion repurchase budget on May 7.

The buy-back was announced after HSBC’s second-quarter net profit fell 3.6 per cent to US$6.4 billion, beating the US$5.7 billion expected by analysts. The bank earned US$6.64 billion in the same quarter last year.

Pre-tax profit rose 2 per cent to US$8.9 billion, better than the US$7.88 billion expected by analysts, said the bank that traces its roots to Hong Kong and Shanghai nearly two centuries ago.

HSBC said it would pay a quarterly dividend of 10 US cents per share in addition to its share buy-back.

“Our investment in wealth is delivering higher, more diversified revenue and we continue to grow our core international and scale businesses, all of which helped us to provide US$13.7 billion of distributions in the first half,” said Quinn in his final earnings statement to the Hong Kong stock exchange before his retirement. “We are confident that we have the right strategy and model to grow revenue, even in a lower interest rate environment, and are therefore providing new guidance of a mid-teens return on average tangible equity in 2025.”