HSBC pre-tax profit up 5% to $10.2 billion in first half 2017

HSBC said profits were up in the first half of the year in what it called an ‘excellent’ result after a turbulent 2016

31 July 2017, 8:08am
HSBC has reported a 5% rise in profits in the first half of 2017
HSBC has reported a 5% rise in profits in the first half of 2017
Europe's biggest bank reported a pre-tax profit of $10.2 billion (€8.69 billion) for the first six months, up by about $500 million.

The Asia-focused giant has been on a recovery drive over the past two years to streamline the business and slash costs, and has laid off tens of thousands of staff.

Pre-tax profit for the six months to June rose five percent to $10.2 billion compared with $9.7 billion for the same period last year.

As widely expected, the bank also announced a share buyback of up to $2 billion which it expects to complete by the end of 2017.

HSBC's share price has rallied in the past year, helped by the weak pound which makes profits earned abroad more valuable when repatriated to the UK.

The results came after operating expenses dropped 12 percent to $16.4 billion, partly stemming from a sell-off of its Brazil operations.

Since the 2008 financial crisis, HSBC has been cutting jobs and selling assets to make the group more profitable while still making dividend payments to shareholders

"In the past 12 months we have paid more in dividends than any other European or American bank and returned $3.5bn to shareholders through share buy-backs," HSBC's chief executive Stuart Gulliver said.

The bank has used share buybacks to offset the impact of shares being paid out as dividends.

Chairman Douglas Flint described the results as "extremely pleasing".

Flint said that there were still uncertainties due to increasing geopolitical tensions and "ambiguous predictions" around Britain's future relationship with the European Union post-Brexit, but described HSBC's performance as "resilient".

HSBC Malta registers 37% decrease in profit

HSBC Malta reported a profit before tax of €25.9 million in the first half of the year. This represents a decrease of €15.4 million (37%) on the corresponding period in 2016 where the bank reported €41.3 million in profit before tax.

The performance during the first six months of 2017 was adversely impacted by persistent low interest rates, risk management actions and increased compliance costs but was in line with the management’s expectations.

Profit attributable to shareholders amounted to €16.9 million resulting in earnings per share of 4.7 cents compared with 7.5 cents in the first half of 2016. The board proposes to maintain the current dividend pay-out ratio of 65% and recommends an interim gross dividend of 4.7 cents per share (3 cents per share net of tax). The interim dividend will be paid on 11 September 2017 to shareholders who are on the bank’s register as at 10 August 2017.

All three main business lines, Retail Banking and Wealth Management, Commercial Banking and Global Markets, continued to be profitable during the six month period under review.