HSBC Holdings, Europe’s largest lender, is set to repurchase up to $3 billion in shares after surpassing earnings expectations, highlighting recent strategic changes.
The stock buyback is in addition to the $6 billion buyback programme which was announced earlier this year.
The bank obtained a 10% pre-tax profit rise from the $7.71 billion posted a year ago, amounting to a total of $8.5 billion in the third quarter of 2024 and beating analyst estimates of $7.6 billion. The quarterly profit after tax came in at $6.7 billion.
HSBC obtained a revenue increased 5% increase in revenue, which totalled $17 billion for Q3 2024. The growth was attributed to higher customer activity in wealth products, supported by volatile market conditions, and in foreign exchange, equities and global debt
“We delivered another good quarter, which shows that our strategy is working,” said HSBC CEO Georges Elhedery in a statement. “I’m committed to building on this strong platform for growth.”
The buyback boost follows HSBC’s announcement of its largest strategic overhaul in a decade, announced last week. The company reorganisation included the merger of its global commercial and investment banking units and the creation of standalone units for Hong Kong and the UK, with Asia Pacific and the Middle East forming a new Eastern division.
During the quarter, HSBC gained 243,000 new customers in Hong Kong, and wealth-related fee income rose by 32%. The bank aims to establish itself as a leading wealth bank in Asia, while divesting other global operations.
In the past 18 months, HSBC has handed $34.4 billion to shareholders, mainly in the form of stock buybacks. The most recent buyback announcement will bring the total amount announced this year to $9 billion.
The company has also approved a third interim dividend of $0.1 per share, its third payout in 2024 following payments of $0.41 a share announced earlier this year.
Following the announcement, HSBC’s shares rose by 2.4% in Hong Kong afternoon trading.
