(1 August 2017 – Global) HSBC has latest financial results have beat market estimates for the the first half of 2017, as the bank announced a US$2 billion (A$2.5 billion) share buyback on the back of a growing capital base.
The bank said its pre-tax profit for the first half of 2017 came in at US$10.24 billion, five percent higher than a year ago while reporting adjusted revenue of US$26.1 billion.
“In the past 12 months we have paid more in dividends than any other European or American bank and returned US$3.5 billion to shareholders through share buy-backs. We have done this while strengthening one of the most resilient capital ratios in the industry,” Stuart Gulliver, HSBC group chief executive said.
The buybacks and sustained dividends show HSBC further ahead in its turnaround compared with British-based rivals including Barclays and Standard Chartered which have suspended payouts as they restructure.
“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,” the bank’s Finance Director Iain Mackay said.
HSBC’s common equity tier 1 ratio was 14.7 percent at the end of June, the highest among major European banks.
The ratio is set to increase further as the bank repatriates about US$8 billion held in its US subsidiary, following approval last year from the US Federal Reserve.
“I cannot tell you 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,” Gulliver told reporters.