HSBC announces surprise 74% rise in profits and $2 billion buyback

HSBC Holdings reported a 74% rise in third quarter profit, beating market expectations, as the Asia-focussed bank released cash set aside for expected bad loans that have not materialised.

The bank posted pretax profit of $5.4 billion for the quarter to September, versus $3.1 billion a year earlier and the $3.78 billion average estimate of 14 analysts compiled by HSBC.

HSBC also announced a share buyback of up to $2 billion, as it continues to return excess capital to shareholders in place of investing the cash in its businesses.

HSBC released $700 million in cash it had put aside in case pandemic-related bad loans spiked, as opposed to the same time a year ago when it took an $800 million charge in expectation of such soured debts.

In reality economic conditions have improved while loans have performed better than expected, the bank said.

The results from the London-headquartered bank come as rivals such as Citigroup are riding a M&A boom https://www.reuters.com/world/us/us-banks-beat-profit-estimates-economic-rebound-red-hot-markets-2021-10-14, while fending off weakness in the lending business.

Check out the latest DH videos here: