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HSBC pledges $2bn share buyback as profits rise


HSBC said up to $1 billion in revenue could be at risk from Britain's exit from the European Union but it should be able to preserve the income by shifting associated jobs to Paris, Gulliver said. Its standout business was global banking where revenues rose 16 per cent from a year earlier to $1.06 billion, outpacing an average 1 per cent rise across the five major USA banks. At its height, the project employed 2,000 people, according to HSBC chairman Douglas Flint - about 800 more than are employed at HM Treasury. It completed a share buyback of $1 billion during in April.

The company΄s profits from January to June in 2017 rose 5 percent to $10.2 billion (9.12 billion euros) compared with $9.7 billion for the same period previous year.

The share buybacks have been used to offset the effect of shares being paid out as dividends.

"We're now looking at buybacks as a regular part of our toolkit", said chief executive Stuart Gulliver. He has spent most of his tenure attempting to improve profitability by shrinking HSBC's vast global network, exiting nearly 100 businesses and 18 countries. 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", HSBC finance director Iain Mackay told Reuters. New capital regulations have also depressed shareholder payouts as banks stockpile cash to swell their loss-absorbing buffers.




HSBC said the increased shareholder pay-outs were achieved whilst also "strengthening one of the most resilient capital ratios in the industry".

That ratio will increase more as the bank starts repatriating $8 billion that is at its subsidiary in the US, following last year's approval by the United States Federal Reserve and possibly allowing for more buybacks.

The announcement takes the total of HSBC share buybacks since August 2016 to $5.5bn.

"The $200 to $300 million total is the cost of the transition to France", Gulliver said after HSBC reported an increase in profits for the first half of the year. Mr. Flint is leaving in September and will be replaced by Mark Tucker, former CEO of AIA Group Ltd. Mr. Gulliver has said he would leave next year after a new CEO is named.

HSBC has carried out two years of recovery measures to streamline its business, cutting tens of thousands of staff in the process.

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