HSBC unveils $3bn buyback as profits surge in CEO Quinn's final results

31st Jul 2024 07:04

(Sharecast News) - HSBC on Wednesday said it would start a $3bn share buyback after the Asia-focused bank reported estimate-busting interim profits in its final set of results under chief executive Noel Quinn.

Pre-tax profits rose 1.5% to $8.9bn and smashed analysts' forecasts of $7.8bn. The bank, which makes most of its profits in Asia, benefited from growth in its wealth division and increased demand for investment banking services.

Quinn, who has been CEO for five years will be succeeded by finance chief Georges Elhedery. The bank announced that financial controller Jon Bingham would take on the chief financial officer role on an interim basis.

Net interest income was down $1.4bn to $16.9bn, while the net interest margin - the difference between what the bank charges on loans and pays out on savings - fell to 1.62% from 1.7% a year earlier.

The payouts come after HSBC managed to eke out a 1.5% increase in pre-tax profit to $8.9bn in the second quarter, up from $8.7bn a year earlier.

HSBC has identified its wealth business, which encompasses life insurance and private banking, as a main driver for revenue expansion. The bank also noted an increase in profits within its core markets of Hong Kong and the UK.

It also lifted forecasts for net interest income for the full year to $43bn from $41bn, but said this depended on the path of global interest rates.

"After achieving a record profit performance in 2023, we had a strong first half financial performance that reflected our strategy execution and revenue diversification over the past five years," Quinn said.

"We remain confident that we can deliver attractive returns, even in a lower interest rate environment, as a result of macroeconomic trends that play to our strengths, market-leading businesses connecting high-growth markets that we are continuing to invest in, and ongoing cost discipline."

Reporting by Frank Prenesti for Sharecast.com