HSBC announces share buyback plan as profits climb

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The Asia-focused lender also unveiled plans for a $2-billion share buyback in the second half of the year.

HSBC said pre-tax profit for the first six months of the year came in at $10.2 billion, firmly ahead of the $9.5 billion consensus provided by the bank and up 5.15% from the same period last year. It completed a share buyback of $1 billion during in April.

The largest European bank saw its shares move up 3% to a high of four years in London on Monday, as the bank signaled more buybacks and overall confidence it will continue improving its revenues from growth across Asia. HSBC, like many global banks, spent the years up to the 2008 financial crisis building its empire.

The company also announced it would be buying back $2 billion in shares in the last half of the year. Subsequently, the group is growing market share in numerous products that are central to its strategy.

Ian Gordon, analyst at Investec, says: "After allowing for the benefit from usual seasonality within this outturn, we still struggle to see HSBC achieving more than 10% ROE before 2020". But on Monday he said that he could stay at the bank until December 2018, if an external candidate is appointed to take over.

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"We've got revenues heading in the right direction across all our major businesses and regions" and are in a "very strong capital position, " Mackay said in a Bloomberg Television interview.

The latest buy-back brings the total value of shares repurchased since August 2016 to $5.5 billion, having announced a buy-back of $1 billion in the spring.

HSBC pulled capital from its USA business earlier this year for the first time in more than a decade.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The market has reacted positively, mainly because it likes the smell of two billion USA dollars of cash heading back to investors from a share buy-back scheme taking place in the second half of this year".

"I can not tell you whether we'll do a further buyback this year, but we are using buybacks as a regular part of the toolkit to manage returns to shareholders", Gulliver said in the conference call. Mr. Flint is leaving in September and will be replaced by Mark Tucker, former CEO of AIA Group Ltd. Mr. Gulliver has said he would leave next year after a new CEO is named.