HSBC announces $2bn share buyback plan amid strong earnings
07:38, 25 October 2021
HSBC Holdings reported strong earnings in the third quarter and announced a $2bn (£1.45bn) share buyback plan as the lender said that the worst effects of the Covid-19 pandemic is over.
In thethree months ended 30 September, the London-headquartered bank reported a pre-tax profit of $5.4bn, nearly 76% higher than $3.07bn in the corresponding quarter a year earlier.
Asia contributed $3.3bn in pre-tax profit, over 60% of the total, while that of UK operations amounted to $1.5bn. HSBC’s revenue in the September quarter rose 1% to $12bn.
Profits double
It released $700m it had set aside for bad loans provisioning in the quarter, in contrast to the $800m charge it made a year earlier. As a result, net profit more than doubled to $3.54bn from $1.36bn a year ago.
“We had a good third-quarter performance, with strong growth in profits supported by additional credit provision releases. Our strategy remains on track, with good delivery in all areas,” CEO Noel Quinn said in a statement accompanying the financial results.
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Share buyback
“While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us. This confidence, together with our strong capital position, enables us to announce a share buyback of up to $2bln, which we expect to commence shortly,” he added.
In the first nine months of the year, the Asia-focused lender reported a revenue of $37.56bn, down from $38.67bn a year ago.
In the January-September period, HSBC freed up $1.4bn from its bad loans provision as opposed to the $7.6bn charge in the previous year. That helped profit before taxes surged to $16.42bn from $7.39bn.
Following the earnings announcement, shares in HSBC on the Hong Kong stock exchange rose as high as HKD47.35 before paring some gains and trading at HKD46.55 at midday, 0.1% higher than Friday’s close.
Read more: Citigroup beats earnings expectations amid corporate refresh
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