HSBC Holdings PLC on Monday said profit grew 5 percent in the six months through June and announced its third share buyback in a year, indicating continued progress in the six-year turnaround plan of Europe’s biggest bank.
HSBC, like many global banks, spent the years up to the 2008 financial crisis expanding its empire with a string of acquisitions. Recent years have seen it cut jobs and sell assets worldwide to shrink the group back to profitability and maintain dividend payouts in an era of stricterc.
The bank’s Chief Executive Officer Stuart Gulliver and Chairman Douglas Flint are both retiring, leaving a legacy of improving revenue and returning more capital to shareholders, having focused on trimming the bank’s empire and shifting focus to Asia.
The latest share buyback, of up to $2 billion, comes as HSBC uses excess capital to offset the dilutive effect of shares paid out as dividends. It completed a previously announced $1 billion buyback in April.
“The return of capital comes from the fact that the business is very accretive, very profitable … the dividend is 51 cents for the foreseeable future,” HSBC Finance Director Iain Mackay told Reuters on Monday. Read More