HSBC Stock Up On Q2 Pre-tax Profit Growth, Outlook Lift, $3 Bln Buyback

(RTTNews) - Shares of HSBC Holdings Plc were gaining more than 4 percent on the London Stock Exchange as well as in pre-market activity on the NYSE after the British lending major on Wednesday reported higher pre-tax profit, despite weak revenues. The company also lifted fiscal 2024 banking net interest income outlook, and also said it intends to initiate a share buy-back of up to $3 billion, which is expected to be completed within three months.

Separately, HSBC said that it has appointed Jonathan Bingham as Interim Group Chief Financial Officer with effect from September 2, along with his existing responsibilities as Global Financial Controller. He will not be appointed as an Executive Director.

A process to identify the next permanent Group Chief Financial Officer is underway. The company in mid-July had appointed CFO Georges Elhedery as Chief Executive, with effect from September 2, succeeding Noel Quinn, who would step down as Chief Executive and as an Executive Director.

Looking ahead, based upon current forecasts, the company expects banking net interest income or NII of around $43 billion in 2024. HSBC previously expected Banking NII of at least $41 billion.

Further, the company now targets a return on average tangible equity or RoTE, excluding the impact of notable items, in the mid-teens for both 2024 and 2025.

Over the medium to long term, HSBC continues to expect mid-single digit year-on-year percentage growth in customer lending.

Further, the Board has approved a second interim dividend of $0.10 per share, same as last year.

Regarding its financial results, Noel Quinn, Group Chief Executive, said, "The first half saw another strong profit performance, driven by growth in our scale businesses and in areas where we have been investing. There was strong revenue growth in Wealth, transaction banking revenue remained stable and wholesale lending increased again in the second quarter, on a constant currency basis, after growing in the first quarter."

In its second quarter, HSBC's profit before tax grew 2 percent to $8.91 billion from last year's $8.77 billion.

Profit after tax, meanwhile, fell 3 percent to $6.83 billion from last year's $7.05 billion.

Revenue for the quarter declined 1 percent to $16.54 billion from $16.71 billion a year ago.

In London, HSBC shares were trading at 704.30 pence, up 4.05 percent.

In pre-market activity on the NYSE, HSBC shares were gaining around 4.3 percent to trade at $45.40.

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