HSBC announces US$1 billion buyback after profit growth misses
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HSBC posted a pre-tax profit in the third quarter of US$9.6 billion, missing a company-compiled estimate of US$9.7 billion.
PHOTO: REUTERS
- HSBC said it will buy back US$1 billion (S$1.28 billion) of shares after third-quarter pretax profit of US$9.6 billion missed estimates of US$9.7 billion.
- The bank has restarted buybacks after pausing them for its US$14 billion takeover of Hang Seng Bank, and CEO Georges Elhedery said clients still turn to HSBC in uncertain times.
- Elhedery has cut jobs and reshaped HSBC towards core Asian markets. Investors have backed the plan, with shares more than doubling since September 2024.
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HSBC Holdings said it would buy back shares worth US$1 billion (S$1.28 billion) as it reported third-quarter earnings that fell short of estimates.
The London-based lender announced its second consecutive quarterly buyback, having resumed stock repurchases over the summer after halting a previous programme in the wake of its US$14 billion takeover of Hang Seng Bank.
HSBC posted a pre-tax profit in the third quarter of US$9.6 billion, missing a company-compiled estimate of US$9.7 billion, largely driven by higher interest rates.
“Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities,” chief executive Georges Elhedery said in a statement.
HSBC has over the past couple of years radically overhauled its business following the appointment of Elhedery in September 2024.
Under his leadership, the bank has shuttered, sold or merged several business lines, cutting thousands of jobs as it looks to refocus its operations on its core Asian markets.
Investors have lauded Elhedery’s restructuring efforts and the company’s shares have more than doubled in value since he took over, also rising about 15% in 2026 before the third-quarter results.
The announcement disappointed investors.
HSBC shares declined as much as 7.5% in London on Oct 27, making the stock the worst performer on the Stoxx Europe 600 Banks Index. In Hong Kong, its shares similarly dropped after the results. Its London shares are still up 8.4% this year.
Wealth management has been one of the bank’s strongest performing divisions as the lender has focused on attracting a larger slice of Asia’s growing ranks of mass affluent to park their money with its advisers and fund managers.
The bank recorded double-digit growth in the second quarter despite the backdrop of a Chinese clampdown on cross-border capital flows.
Costs are an area of focus for investors and analysts, with HSBC saying in August that it would consider boosting its bonus pool if the business’s strong performance continued into the second half of 2026. BLOOMBERG