HSBC, breaks forecasts, Q2 profit explodes 60%...Pre-tax profit '10.1 billion dollars'

▲ HSBC/AI generated image

HSBC announced earnings that exceeded market expectations, recording a pre-tax profit of $10.1 billion in the second quarter.

According to CNBC on August 4 (local time), HSBC, Europe's largest bank, reported a pre-tax profit of $10.1 billion in the second quarter, a 60% increase compared to the same period last year. This surpassed the market forecast of $9.51 billion. The increase in both the bank's net interest income and fee income boosted performance.

Second-quarter revenue increased by 16% year-on-year to $19.1 billion, exceeding the market forecast of $18.57 billion. A $1.3 billion profit from major one-off items contributed to the revenue increase, and a net positive effect of $2.6 billion was reflected in pre-tax profit. Costs related to business restructuring amounted to $200 million.

HSBC's net interest income (NII) in the second quarter was $9.29 billion, up 9% from the same period last year. Operating expenses decreased by 2% due to reduced business restructuring costs. The target for return on tangible equity (RoTE), a profitability indicator, was maintained at 17%. The annualized RoTE, excluding major one-off items, recorded 19.1%.

Shareholder returns will also be expanded. HSBC's board approved a second interim dividend of $0.1 per share. The bank also plans to initiate a share buyback program of up to $1 billion. The share buyback is expected to be completed before the announcement of third-quarter earnings.

[Key Takeaways]

-HSBC's second-quarter pre-tax profit of $10.1 billion exceeded the market forecast of $9.51 billion.

-Revenue increased by 16% year-on-year to $19.1 billion, and net interest income increased by 9% to $9.29 billion.

-HSBC plans a second interim dividend of $0.1 per share and a share buyback program of up to $1 billion.

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