HSBC announces share buyback of up to $1 billion as third-quarter profit meets estimates
HSBC, the largest bank in Europe, announced on Tuesday that its pretax profit for the third quarter was in line with analysts' expectations. Alongside this announcement, the bank revealed plans for a share buyback program amounting to up to $1 billion, set to be completed by the end of the year.
In the third quarter, HSBC's revenue increased to $18.6 billion, up from $17.8 billion during the same time frame last year. The bank's net interest income also saw a 6% rise, bolstered by increased fee income from its corporate and institutional banking as well as its wealth management divisions.
When comparing HSBC's third-quarter performance to the consensus estimates compiled by the bank, the results were as follows:
- Pre-tax profit: $9.63 billion, compared to the expected $9.69 billion
- Revenue: $18.6 billion, against an anticipated $18.93 billion
The bank's pretax profit for the quarter was $9.6 billion, marking a 32% increase compared to the same period last year. This growth was partly attributed to the absence of $1.4 billion in legal provisions that were recorded in the previous year. Additionally, the increase in revenue and a decrease in credit losses contributed positively to the earnings.
HSBC also declared a third interim dividend of 10 cents per share. The net interest income for the third quarter reached $9.3 billion, driven by growth in deposits and improved yields from reinvestments in the bank's structural portfolio.
Operating expenses saw a 12% decline year-on-year, totaling $8.8 billion, primarily due to the lack of legal provisions that impacted the bank's expenses last year. However, when excluding exceptional items, expenses did rise due to inflation and increased investments in technology.
These earnings come at a time when HSBC is reportedly contemplating significant layoffs within its U.K. wealth management sector as part of a larger strategy to integrate artificial intelligence into its operations.