HSBC Q3 profit beats expectations, announces $3 bln buyback

Investing.com– Asia-focused lender HSBC Holdings PLC (LON:) clocked a stronger-than-expected third-quarter profit on Tuesday amid sustained strength in its wealth management unit and as a string of recent cost cutting and restructuring measures bore fruit.

The bank announced a $3 billion buyback, continuing its trend of bumper buybacks as it returned more capital to shareholders. Tuesday’s buyback follows a $3 billion buyback announced during HSBC’s second-quarter earnings. 

HSBC’s profit before tax rose to $8.48 billion from $7.6 billion in the three months to September 30. The print was higher than Bloomberg estimates that it would stay flat at $7.6 billion. 

The stronger profit was driven chiefly by improved activity in wealth management, which saw HSBC’s Q3 revenue rise by 5% to $17 billion, even as net interest income sank to $7.6 billion from $9.2 billion.

HSBC declared a third interim dividend of $0.10 a share. 

The lender had earlier in October announced a split in its east and west operations- the latest in its long-running restructuring that saw the disposal of several regional units. 

The split was part of a greater revamp announced by new CEO Georges Elhedery, although more details on the changes are only expected when HSBC announces its annual earnings in February. 

HSBC maintained its annual guidance, targeting a mid-teens return on average tangible equity in 2024 and 2025. 

Net interest income is expected at $43 billion in 2024, with cost growth targeted at 5% for the year.