HSBC Q2 Profit Climbs, Lifts FY23 View; Plans Up To $2 Bln Buyback

Shares of HSBC Holdings plc were gaining in London stock exchange as well as in pre-market activity on the NYSE, after the British banking major reported Tuesday significantly higher profit and revenues in its second quarter. The company also raised its fiscal 2023 profit view.

Further, the firm said it intends to initiate an additional share buy-back of up to $2 billion, which is expected to commence shortly and complete within three months.

Noel Quinn, Group Chief Executive, said, “The biggest challenge we all face remains the uncertainty within the external environment. High inflation remains a significant concern for many of our customers….. Overall, we have delivered a strong first-half performance and are confident of delivering our revised return on tangible equity target for 2023 and 2024.”

For fiscal 2023, HSBC said it has raised fiscal 2023 guidance for net interest income to above $35 billion, citing the current market consensus for global central bank rates.

The company previously expected net interest income to be at least $34 billion in 2023, after including an approximately $2 billion reduction due to the implementation of IFRS 17 ‘Insurance Contracts’.

Based on the current path implied by the market for global policy rates, HSBC now targets a RoTE in the mid-teens for 2023 and 2024, which excludes the impact of material acquisitions and disposals.

Further, the Board has approved a second interim dividend of $0.10 per share, payable on September 21.

For the second quarter, profit before tax increased 89 percent to $8.77 billion from last year’s $4.64 billion. Profit after tax was $7.05 billion, up 28 percent from $5.50 billion a year ago.

Revenue was $16.71 billion, a growth of 36 percent from last year’s $12.24 billion. Revenues were benefited by growth across all of global businesses, primarily reflecting interest rate rises.

There were good performances in insurance in WPB and in Debt Capital Markets in GBM, which offset reductions in Global Foreign Exchange and Equities.

In London, HSBC shares were trading at 661.87 pence, up 2.41 percent. The stock was moving up around 1.9 percent in pre-market activity on the NYSE at $42.58.

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