HSBC Profit Beats Estimates as Bank Announces Stock Buyback

Meanwhile, a third share buyback in a year underlined progress in the turnaround plan for Europe's biggest bank, with profit also growing by 5pc in the first half of 2017.

Net profit for the first half of the year rose 10% to $6.99bn from $6.36bn for the same period in 2016.

Reported pre-tax profit for the six months to June rose 5% to $10.2bn compared with $9.7bn for the same period in 2016.

HSBC said up to $1 billion in revenue could be at risk from Britain's exit from the European Union but it should be able to preserve the income by shifting associated jobs to Paris, Gulliver said.

The positive earnings report comes as Douglas Flint prepares to step down as HSBC's chairman in October.

"We're now looking at buybacks as a regular part of our toolkit", said chief executive Stuart Gulliver.

The boost is likely to have been aided by an announcement from the group of a further $2 billion share buyback which it expects to be completed by the end of 2017. Subsequently, the group is growing market share in numerous products that are central to its strategy. Analysts said the results had outstripped predictions.

"We've got revenues heading in the right direction across all our major businesses and regions" and are in a "very strong capital position, " Mackay said in a Bloomberg Television interview.

The bank's return on equity improved to 8.8 per cent in the first half, from 7.4 per cent a year earlier.

HSBC has implemented wide-ranging structural changes since the 2008 financial crisis focused on streamlining the business and bringing down operating costs. At the 2015 strategy day, Mr. Gulliver laid out an aim to get revenue growth in its global network above GDP, and said he tracks the estimated figure every two weeks.

HSBC also said that it would be buying back $2bn worth of shares before December.

Focus on ChinaThe bank announced two years ago it would hire 4,000 staff and lend more in China's southern Pearl River Delta region, a plan that has since encountered some setbacks as China's growth slowed, showing both the risks and opportunities. Mr. Flint is leaving in September and will be replaced by Mark Tucker, former CEO of AIA Group Ltd. Mr. Gulliver has said he would leave next year after a new CEO is named.

  • Wendy Palmer