HSBC’s profits have soared as it continues to cut costs and cash in on high interest rates around the world.
Europe’s biggest bank said Tuesday that pre-tax profit grew by $4.1 billion to $8.8 billion in the second quarter compared to the same time a year before. That trumped analyst expectations of about $8 billion.
Revenue also rose by $4.5 billion to $16.7 billion. The strong performance led the London-based lender to raise its outlook for the rest of the year, citing the current consensus for global interest rates.
HSBC now projects a return on tangible equity — a key measure of profitability — “in the mid-teens for 2023 and 2024, which excludes the impact of material acquisitions and disposals,” it said.
That compares with a target of “at least 12%” the bank had set out in May.
The lender also said its board had approved a second interim dividend for shareholders of 10 cents per share. The payout would come on top of an existing quarterly dividend of the same value.
HSBC’s results over the past year have shown a steady recovery from the pandemic. In May, the lender revealed a tripling of quarterly profit, in part due to high interest rates and a provisional gain it expected from buying the UK arm of failed US lender Silicon Valley Bank.
In a sign of renewed confidence, HSBC said Tuesday it would conduct another share buyback of up to $2 billion, following similar announcements in recent months.
HSBC shares rose 1% in Hong Kong Tuesday following its earnings release.
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