HSBC resumes buyback after big profit jump in first half

British Banking giant HSBC said Tuesday it would buy back up to US$1 billion of shares after a big jump in profits in the first half of 2026.

The profits increase came on the back of "growth in banking net interest income and higher fee and other income", the lender said in its earnings report, adding that the profit in banking increased by US$1.4 billion.

"HSBC is becoming the stronger bank we set out to build. We are executing our strategic priorities with pace, precision and discipline," CEO Georges Elhedery added in a statement.

Profit attributable to shareholders rose around 27 percent to US$14.6 billion in the six months to June, from US$11.5 billion a year earlier.

Pre-tax profit increased 23 percent to US$19.5 billion.

Pre-tax profit soared 60 percent on-year to US$10.1 billion in the April-June quarter, driven by strong growth in the wealth management division.

In a sign of confidence, HSBC said it would proceed with a share buy-back of up to US$1 billion, with its board having approved a second interim dividend of US$0.10 per share.

The move comes after the firm paused buy-backs for three quarters as it rebuilt capital following the privatisation of Hang Seng Bank.

However, good news was partly offset by expected credit losses of US$2.4 billion -- US$400 million higher than the first half of 2025.

The bank said it lost US$400 million in a fraud case involving a British financial sponsor and US$200 million in Hong Kong's commercial property sector.

But it also revised upwards its total target savings to US$2 billion, from the US$1.5 billion target set earlier.

The bank would continue to streamline and upgrade its operating model, carrying out a multi-year, AI-led scheme to simplify workflow.

HSBC had announced 15 business or market exits since last year, Elhedery added.

The lender has in recent weeks announced several deals to sell off units as part of a global restructuring to focus on its core markets.

Those plans include selling a US$25.3 billion Australian home loan book to Blackstone and a US$2.1 billion Singapore insurance business to Germany's Allianz.

It also announced Sunday the sale of its retail banking business in Egypt.

The disposals provide investment capacity to drive franchise growth in its strategic-focused areas, the firm said.

Since taking office in 2024, Elhedery has closed HSBC's investment bank in the United States, Britain and Europe.

Shares in the firm have risen to record highs in recent weeks but dipped in Hong Kong on Tuesday.