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HSBC unveils $2bn stock buyback with 74% rise in third-quarter profit

HSBC unveils $2bn stock buyback with 74% rise in third-quarter profit
HSBC unveils $2bn stock buyback with 74% rise in third-quarter profit

HSBC Holdings plc, a UK-based investment bank and financial firm, has reportedly announced a supposed 74% rise in profits in the third financial quarter (Q3), exceeding market expectations, as the Asia-focused banking organization withdrew cash set aside for projected nonperforming debt that did not materialized.

In addition to reporting the better-than-expected profits, HSBC also launched a $2 billion share repurchase program, as it seeks to return excess funds to investors rather than investing it in its various businesses.

Neil Quinn, HSBC’s Chief Executive, stated that while the company continues to remain cautious about the external risk environment, it can be fairly said that the recent lows are no longer a threat.

Quinn, who was appointed to the role in 2020, just before the pandemic-induced economic collapse began, is counting on Asia to fuel growth by investing billions in the booming wealth industry and relocating global executives to the location.

The bank earned $5.4 billion in pretax profit in the third quarter, compared to $3.1 billion a year ago and the average $3.78 billion earnings estimated by a list of 14 analysts HSBC compiled.

Apparently, HSBC discharged $700 million in funds it had set aside in anticipation of spikes in pandemic-related bad loans, as compared to the same time a year ago where it took a charge of approximately $800 million in anticipation of similar defaulted debts.

The bank claimed that  economic situation has improved and loans have performed much better than planned.

The London-based bank's earnings come as rivals like Citigroup benefit from a mergers and acquisitions boom despite battling lending problems.

HSBC's investment banking division, on the other hand, reported a drop in revenue compared to the corresponding period a year ago, as its global debt operations particularly slowed.

As per reports, due to inflationary constraints and the timing of various investments and disposals, HSBC said its cost expectations for 2022 had climbed from $31 billion to $32 billion.

Source credit: https://www.thestar.com.my/business/business-news/2021/10/25/hsbc-surprises-with-74-rise-in-3q-profit-announces-2-bln-buyback

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Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.