Business

HSBC sees half-year profits rise by 5%

HSBC sees half-year profits rise by 5%”

It also announced a share buyback program of up to $2 billion, which is expected to be completed this year.

In the six months to 30 June, the FTSE 100-listed lender saw pre-tax profits rise 5% year-on-year to $10.2bn (£7.8bn), while net profit for the period rose 10% to $6.99bn. HSBC's North American unit passed a Federal Reserve stress test in June, clearing the way for more than $3 billion of capital to be returned to shareholders, analysts said at the time.

The new buybacks, to be completed by December, will add to the $3.5 billion of repurchases since a year ago that have helped push the lender's stock up more than 50 percent in the past 12 months. HSBC, like many global banks, spent the years up to the 2008 financial crisis building its empire.

The bank also announced a further US$2 billion share buy back.

HSBC said shareholders were now reaping rewards from the repositioning of the group since 2011, with most of the targets set out in a 2015 strategy update now met.

Banks analyst Robert James, who works for Old Mutual Global Investors, said that the key to the investment case for HSBC shares is the $400bn (£304bn) surplus of deposits over liabilities held by the company.

"The return of capital comes from the fact that the business is very accretive, very profitable ... the dividend is 51 cents for the foreseeable future", said HSBC Finance Director Iain Mackay on Monday.

HSBC, Europe's biggest bank, said on Monday it expects Brexit costs to be US$200m-$300m, but it will avoid a more painful hit of up to US$1bn in lost annual revenues by moving business to Paris.

The estimate, one of the most detailed yet by a major bank, includes the costs of relocating up to 1,000 jobs to the French capital as well as associated legal fees, Gulliver told reporters on a conference call.

"I can not tell you whether we'll do a further buyback this year, but we are using buybacks as a regular part of the toolkit to manage returns to shareholders", Gulliver said in the conference call.

HSBC has reported a rise in half-year profit and announced a two billion U.S. dollar (£1.5 billion) share buy-back.

Gulliver said he could be at HSBC as late as December 2018 if an external candidate is appointed by incoming chairman Tucker.



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