HSBC Shares Rise After Profit Surprise
- HSBC experienced a slight pretax profit decline in the first half of the year but exceeded market expectations.
- The bank attributed its success to favorable conditions created by a high-interest rate environment.
- This led to a 3% increase in its shares, boosted by plans for a buyback.
LONDON — HSBC, Europe's largest lender, unveiled a share buyback program worth up to $3 billion on Wednesday, following a robust pretax profit of $21.56 billion for the first half of 2024. This figure, while slightly down from $21.66 billion in the same period last year, exceeded market expectations, buoyed by a favorable high-interest rate environment. Following the announcement, HSBC's shares rose by 3.12% in London and approximately 4.4% in Hong Kong. Outgoing CEO Noel Quinn highlighted the bank's strategic focus on expanding its international retail and wealth business, which has contributed to a diversified revenue stream. Wealth revenue surged by 12% to $4.3 billion, driven by growth in investment distribution, asset management, and life insurance. HSBC emphasized its commitment to maintaining a strong presence in key markets, particularly Hong Kong and the U.K., where it welcomed 345,000 new customers in Hong Kong and an 8% increase in international customers in Britain. The bank's Common Equity Tier 1 (CET1) capital ratio improved to 15.0%, surpassing its medium-term target range of 14% to 14.5%. HSBC also provided guidance for a "mid-teens return on average tangible equity in 2025," aligning with its optimistic outlook for 2024. Quinn expressed confidence in the bank's ability to sustain revenue growth from diverse sources beyond traditional interest income, reflecting effective cost control measures implemented since 2020.