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Business

HSBC pledges share buyback scheme after half-year profits

The company's shares jumped 2.77 percent in early morning trading in Hong Kong. It also announced a share buyback program of up to $2 billion, which is expected to be completed this year.

HSBC profits rose 12 percent in the first half of 2017 as the Chinese-British bank recovered from a previously unstable year.

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 last year.

Stuart Gulliver, chief executive of the HSBC Group, described the results as "excellent."

Read more: HSBC reports net profit fall of 82 percent

"It is extremely pleasing to report that, in the first half of 2017, it delivered a strong set of results across its major businesses," assessed outgoing Chairman Douglas Flint, who said the bank was well-positioned for the future.

In the same year which saw Donald Trump elected as US president and the United Kingdom vote to leave the European Union, HSBC's profits slumped to $2.48 billion compared with $13.52 billion in 2015 - a drop of 82 percent.

Changes to come at HSBC

HSBC has implemented wide-ranging structural changes since the 2008 financial crisis focused on streamlining the business and bringing down operating costs.

In 2015, the Asia-focused bank confirmed it would shed 50,000 jobs to save up to $5 billion.

As part of changes to the bank's management structure confirmed in March, Flint will be replaced by Insurance group AIA Chief Executive Mark Tucker in October, while Gulliver will step down in 2018.

Read more: HSBC earnings take a dive amid Brexit woes

Meanwhile, HSBC's share price in Asia bounced back after the bank confirmed a further $2 billion share buyback, which takes the total stock it has promised to buy up to $5.5 billion.

The bank's Hong Kong-listed stock rose almost 3 percent in morning trading, with confidence returning after a period of instability.

"In the past 12 months we have paid more in dividends than any other European or American bank and returned $3.5 billion to shareholders through share buybacks," Gulliver reportev in a company statement.

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rd/hg (AFP, Reuters)

 

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