Profit Surge and Power Moves: HSBC’s $3 Billion Buyback and Global Shake-Up Ignite Investor Buzz

HSBC Holdings plc has announced a fresh $3 billion share buyback, reinforcing its commitment to shareholder returns as the banking giant navigates a period of major restructuring and market uncertainty. The move comes on the back of strong quarterly profits and signals confidence in the bank’s long-term strategy, even as it braces for muted lending demand and ongoing global volatility.

 

Key Highlights:

 

$3 Billion Share Buyback: HSBC’s board has approved a new $3 billion share repurchase program, adding to the $6 billion already returned to shareholders this year. The buyback is expected to be completed within four months, further boosting shareholder value and market confidence.

 

Strong Profit Performance: The bank posted a 10% jump in quarterly pre-tax profit to $8.5 billion, surpassing analyst expectations. Robust results from wealth management and wholesale banking divisions have underpinned this growth, even as the bank embarks on one of its largest overhauls in history.

 

Cautious Lending Outlook: HSBC expects expected credit loss (ECL) charges as a percentage of average gross loans to remain between 30 and 40 basis points in 2025. Given ongoing uncertainty and market turmoil, the bank anticipates demand for lending will stay muted throughout the year.

 

Medium- to Long-Term Growth: Despite short-term caution, HSBC maintains its outlook for mid-single digit percentage growth in year-on-year customer lending balances over the medium to long term, with a focus on expanding fee income in wealth management.

 

Strategic Review in Malta: HSBC has launched a strategic review of its business in Malta as part of its global restructuring plan, which also includes merging operations and splitting its geographic footprint into East and West under a new leadership structure.

 

Market Reaction: HSBC’s shares rose in both London and Hong Kong following the announcements, with investors welcoming the bank’s strong results and proactive capital management.

 

Sources: BBC, Business Standard, HSBC, Euronews, Yahoo Finance