HSBC profit misses estimates on costs, to buy back $3 billion of shares
The London-headquartered bank with a market value of $118.6 billion said it aimed to complete the share buyback by next February, lifting the total buybacks announced this year to $7 billion.
HSBC Holdings reported on Monday a 240 per cent increase in third-quarter pre-tax profit as higher interest rates boosted the bank's profitability and helped it fund a fresh $3 billion share buyback. The results from Europe's biggest bank showed the pressure it is under to deliver to long-suffering investors now that interest rates worldwide are rising, as its profit more than doubled in the third quarter nonetheless missed analysts' expectations because of higher costs.
HSBC also indicated costs are likely to increase by 4 per cent this year, more than its previous goal of a 3 per cent rise, as technology and operating spending grows and it considers a boost to staff bonuses in the fourth quarter.
The bank posted a pre-tax profit of $7.7 billion for the July to September quarter, versus $3.2 billion a year earlier, but the result trailed the $8.1 billion mean average estimate of brokers compiled by HSBC.
The London-headquartered bank with a market value of $118.6 billion said it aimed to complete the share buyback by next February, lifting the total buybacks announced this year to $7 billion.
It also dished out the third interim dividend payout this year of 10 cents per share, bringing the total payout to 30 cents per share.
HSBC's third-quarter net interest margin of 1.70 per cent was squeezed by 2 basis points compared with the prior quarter, reflecting an increase in customers migrating their deposits to term products, particularly in Asia.
In the third-quarter results, the lender booked a $500 million impairment related to the commercial real estate sector in mainland China.
"We continue to monitor risks related to our exposures in mainland China’s commercial real estate sector closely, and there remains a degree of uncertainty in the forward economic outlook, particularly in the UK," the company said in the results statement.
HSBC's Asia-focused competitor Standard Chartered reported last week an unexpected one-third plunge in third-quarter profit due to a nearly $1 billion combined hit from its exposure to China's real estate and banking sectors.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
RCB vs CSK IPL 2024 Ticket Booking Online: Where and how to buy RCB vs CSK tickets online - Check IPL Match 68 ticket price, other details
SIP Returns: How Rs 3,000, 5,000, and Rs 10,000 SIPs can help you build retirement corpus of Rs 1.06 cr, Rs 1.77 cr, and Rs 3.53 cr
Go Digit IPO: Should you subscribe Virat Kohli, Anushka Sharma-backed issue? Here's what Anil Singhvi suggests
Women loco pilots speak about their struggle; many men have to be informed even for 'washroom break' in a moving train
Bandhan Bank Q4 FY24 Results Preview: PAT, interest income likely to grow in almost double digits; asset quality may improve
Gold and Silver rate today (May 16, 2024): Yellow metal futures subdued; white metal hits record high breaches Rs 87,000 mark
11:05 AM IST