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HSBC Holdings PLC said on Wednesday it planned a share buyback programme of up to $3 billion as it reported a slightly lower pretax profit amid a slump in net interest income.
The London-based financial services group posted a pretax profit of $21.56 billion for the first half of 2024, down 0.5% from $21.66 billion a year prior.
Net interest income fell 7.4% to $16.91 billion from $18.26 billion.
Return on average tangible equity annualised edged down to 21% from 22% a year prior.
Chief Executive Officer Noel Quinn said: ‘After delivering record profits in 2023, we had another strong profit performance in the first half of 2024, which is further evidence that our strategy is working. Our investment in Wealth is delivering higher, more diversified revenue and we continue to grow our core international and scale businesses, all of which helped us to provide $13.7 billion of distributions in respect of the first half. We are confident that we have the right strategy and model to grow revenue, even in a lower interest rate environment, and are therefore providing new guidance of a mid-teens return on average tangible equity in 2025.’
HSBC maintained a second interim dividend at 10 US cents per share, meaning the first half payout remained unchanged at 20 cents compared to a year ago.
The company’s common equity tier 1 ratio increased to 15.0% in the first half of 2024, up 0.2 percentage points compared to the fourth quarter of 2023.
This was driven by a reduction in risk-weighted assets. Despite the dip in profit, HSBC intends to initiate a share buyback programme of up to $3 billion, up 50% from the $2 billion announced a year prior. It expects to complete the new buyback within three months.
For 2024, HSBC targets net interest income of around $43 billion, which would be 20% higher than $35.80 billion reported for 2023.
Further, the company reiterated its cost growth guidance of around 5% for 2024 compared to 2023.
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