HSBC Announces $2bn Share Buyback Pushing Share Price up 3%

HSBC Holdings PLC on Monday said profit rose 5 percent in the first half of 2017

HSBC also recorded $0.9bn of cost savings in the first half of 2017, putting it on track to achieve its target of $6bn in cost savings by the end of the year. 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.

Meanwhile, HSBC chairman Douglas Flint said a meeting he attended between Brexit minister David Davis and British company executives this month showed signs of an improved relationship between the government and business over Brexit. It completed a previously announced $1bn buyback in April.

Mould added: "Such a powerful performance will reassure shareholders that China's economy is not about to drop into a debt-laden downturn and drag HSBC with it, especially as total charges for bad loans fell in the first half to US$663mln from $2.4bn a year ago".

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The market has reacted positively, mainly because it likes the smell of two billion U.S. dollars of cash heading back to investors from a share buy-back scheme taking place in the second half of this year".

The latest buyback means the London-based bank has pledged to repurchase $5.5 billion of shares in the past year, and executives said they're prepared to do more.




HSBC faces as much as $300 million in legal and relocation fees as it prepares to move 1,000 staff to Paris, in one of the first indications of the cost of Brexit to the UK's financial industry. Its profit before tax for the period rose 47% to $5.3 billion.

HSBC shares have performed strongly over the past year, as the decline in the value of the pound relative to the dollar has enhanced the value in sterling terms of the bank's overseas earnings. Analysts said the results had outstripped predictions. "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 finance director Iain Mackay.

HSBC generates more than half of its profit in Asia and on Monday it said that pre-tax profit in the region had risen 7 per cent during the period to $7.6bn, particularly spurred by revenue from its wealth management and insurance businesses in Hong Kong.

It has included selling assets, cutting costs and pivoting the bank more towards Asia.

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