HSBC reports a 76% jump in pre-tax profit in Q3

lHSBC reported a $5.4 billion pre-tax profit in the third quarter of 2021

lThe bank also announced its plans for a share buyback of up to $2 billion

HSBC reported its third-quarter earnings on Monday, with a 76% increase in profit. The company also announced plans for a share buyback of up to $2 billion.

The bank beat analysts’ expectations when it reported a $5.4 billion pre-tax profit in the third quarter of 2021. However, the bank raised its cost projections for 2022 to $32 billion from $31 billion, due to inflationary pressures.

The improved earnings were supported by releasing $700 million of cash that had been set aside to prepare for a rise in loan losses during the COVID-19 pandemic. The bank reported profits in all regions during the quarter.

However, its investment banking business recorded a fall in income compared to the same period a year ago as its global debt business softened.

HSBC reported revenue of $12 billion, 0.7% higher than a year ago, for the third quarter. Basic earnings per share increased to 18 cents, compared with 17 cents in the second quarter and 7 cents in the third quarter of 2020.

The bank did not announce any dividends for the third quarter but mentioned that it plans to start a share buyback of up to $2 billion “shortly.”

In an interview with CNBC, HSBC’s CFO, Ewen Stevenson said, “We don’t want to sit on excess capital if we have it, and hence the $2 billion buyback.”

He also told CNBC that the bank’s capital position has been “very strong.” He said the bank wants to reduce its capital ratio to around 14% to 14.5% by the end of next year.

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With inputs from CNBC 

Picture Credits: FT