HSBC pledges $2bn share buyback as profits rise

HSBC Holdings PLC on Monday said profit rose 5 percent in the first half of 2017

The bank had an optimistic run this 2017; they managed to report their pretax profit climbed a massive 46% to $5.3 billion at the same time from a year earlier, HSBC's adjusted costs were also one of the places the company had to trim and apprehend, they managed to cut a total of $7.4 billion or a good 3% for the first half this year.

HSBC is to buy back $2 billion of its shares after reporting a 5 per cent rise in half-year profits, and said repurchases of its stock could become a regular feature in the future.

HSBC said it had seen a seven per cent increase in revenue from transaction banking products, although overall revenue of $26.2bn was 11 per cent lower "primarily due to currency translation differences, the absence of fair value movements on our own debt and revenue from the operations in Brazil that we sold".

The new buybacks, to be completed by December, will add to the $3.5 billion of repurchases since a year ago that have helped push the lender's stock up more than 50 percent in the past 12 months.

The bank had disappointed markets with just a $1 billion share buyback plan in the first six months of the year, after spending $2.5 billion doing so last year in a bid to wind down its cash stockpile. Chairman Douglas Flint is also leaving, to be replaced by Mark Tucker in October.

HSBC could spend up to $300 million moving jobs and parts of its business to Paris following Britain's exit from the European Union, chief executive Stuart Gulliver said yesterday.

The payday for shareholders comes after a $1 billion shares buyback in February and $2.5 billion previous year as part of the global bank's drive to prune its sprawling empire and to improve its share price.

HSBC said shareholders were now reaping rewards from the repositioning of the group since 2011, with most of the targets set out in a 2015 strategy update now met. Analysts said the results had outstripped predictions. Interested investors should note that this latest move takes the amount of buy-backs pledged since the second half of 2016 to $5.5bn.

HSBC pulled capital from its United States business earlier this year for the first time in more than a decade.

"I can not 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 said in the conference call.

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