HSBC boosts investments in growth push, unveils US$2b share buyback

06 May, 2018, 14:44 | Author: Billie Castillo
  • HSBC CFO Mackay Sees Very Good Start to the Year

The bank has announced four buy-backs since 2016, buying a combined US$5.5 billion of shares in the previous three occasions.

HSBC Holdings PLC's new chief executive sought to cheer investors with a share buyback of up to $2 billion, even as the bank reported on Friday an unexpected 4 percent drop in first-quarter pre-tax profit due to a surge in investments.

It said that costs in the first three months were up more than $1 billion to $9.38 billion compared with past year.

HSBC said it's in "active discussions" with the US Department of Justice about solving civil claims based on the department's investigation of HSBC's legacy RMBS securitisation activities.

Adjusted pre-tax profit fell 2.9 per cent to US$6.03 billion, matching a consensus estimate of US$6 billion, while the adjusted revenue was US$13.9 billion. "We are investing to grow revenue further".

HSBC pretax profit declined to $4.8 billion in the first quarter, down 4 percent from a year ago, according to a statement released on Friday.

$1.40 EPS Expected for CVS Health Corporation (CVS) on May, 2
It increased, as 21 investors sold EXTR shares while 50 reduced holdings. 67 funds opened positions while 132 raised stakes. Diam Company Ltd decreased Blackrock Inc ( NYSE :BLK) stake by 1,527 shares to 188,048 valued at $96.64 million in 2017Q4.

"Our global businesses performed well in the first quarter, maintaining momentum from the end of 2017".

Still, the bank - the largest foreign bank operating in China - increased its investments on the mainland and in the United Kingdom in retail banking and wealth management.

The bank had been expected by some analysts to continue its string of earnings growth seen over the a year ago.

The main pillar of that strategy is centred around the fast growing Pearl River Delta region in southern China that borders Hong Kong, and to make it its gateway to the world's second-largest economy HSBC plans to grow its retail and corporate banking business in the region by hiring thousands of staff and opening new branches, a plan that has suffered some setbacks amid China's slowing growth.

Flint, who took over as CEO in February, said that HSBC is benefiting from interest rate hikes and economic growth, particularly in Asia.

Rising interest rates helped the bank generate more profit from a large base of deposits after years of low rates in the United States pushed down margins.

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