Published On: Tue, Aug 1st, 2017

HSBC plans £2bn share buyback after profits soar


Europe’s biggest bank, rebuilding from a string of misconduct issues, will buy back up to $2billion (£1.5billion) of shares, increasing the amount returned to shareholders to $5.5billion since the second half of 2016.

The buyback offsets the impact of shares being paid out as dividends, but it decreases the likelihood of acquisitions.

HSBC continues to see growth opportunities in Asia, where it makes three quarters of its profits, particularly China, where it has secured regulatory approval to set up the first securities company on the mainland to be majority-owned by an investment bank.

The new business is expected to launch in December.

Chief executive Stuart Gulliver hailed an “excellent start to 2017” as interim pre-tax profit rose 5 per cent to $10.2billion.

But it took a $300million hit for payment protection mis-selling.

Gulliver said: “In the past 12 months we have paid more in dividend than any other European or American bank and returned $3.5billion to shareholders through share buybacks.

“I cannot say 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.”

He highlighted significant revenue growth in retail banking and wealth management.

Lending increased in Hong Kong, the UK and Mexico, while wealth management was boosted by an improving appetite for investment.

Gulliver, set to retire next year, said he could be at HSBC as late as December 2018 if an external candidate is appointed by incoming chairman, Mark Tucker.

Shares rose 13½p to 757p.

Current chairman Douglas Flint was bullish, citing “resilient” Chinese data, rising business investment in the US and a return of confidence in the eurozone.

But he warned the UK is “showing some signs of slower growth” amid the inflationary impacts of a weaker currency and Bank of England caution over consumer debt.


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