HSBC Quarterly Profit Drops, Plans $3 Billion Buyback — 2nd Update

By Kosaku Narioka

HSBC Holdings reported a drop in second-quarter net profit and announced a share buyback of up to $3 billion.

The London-based bank said Wednesday that net profit declined 3.6% from a year earlier to $6.40 billion for the three months ended June. That beat the estimate of $5.72 billion in a poll of analysts by data provider Visible Alpha.

Pretax profit rose 1.5% to $8.91 billion.

Net interest income--the difference between interest earned on loans and that paid on deposits--fell 7.1% to $8.26 billion, while non-net interest income increased 12% to $8.28 billion.

Group Chief Executive Noel Quinn said investment in its wealth business is delivering higher, more diversified revenue. "We are confident that we have the right strategy and model to grow revenue, even in a lower interest rate environment," he said.

HSBC said it now expects banking net interest income of about $43 billion in 2024, an upgrade from its previous projection of at least $41 billion.

Second-quarter profit from its global banking and markets business climbed 26% to $1.79 billion and that from commercial banking rose 4.4% to $3.18 billion. Meanwhile, profit from wealth and personal banking fell 0.8% to $3.28 billion.

The bank said it plans to start a share buyback of up to $3 billion and expects to complete it within three months.

Earlier this month, the bank named Georges Elhedery, who has served as chief financial officer since early 2023, as its new chief executive to replace Quinn, who plans to retire.

In nearly 20 years at HSBC, Elhedery has also headed the company's global banking and markets division and its Middle East operations.

Quinn steered HSBC through the Covid-19 pandemic and accelerated its pivot to Asia. The bank retrenched in some Western markets including the U.S. and France under Quinn's leadership.

HSBC named Jonathan Bingham, its global financial controller, as interim chief financial officer and said that a process to identify a permanent candidate is under way.

Expected credit losses and other impairment charges were $346 million in the second quarter, compared with $890 million in the year-earlier period.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

July 31, 2024 01:53 ET (05:53 GMT)

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