HSBC profits up in first half of 2017

By AFP   July 30, 2017 | 11:32 pm PT
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.

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

Reported 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.

HSBC also announced a share buyback of up to $2 billion, expected to be completed in the second half of the year.

Shares were up 2.77 percent at HK$78.55 ($10.06) in early afternoon trading in Hong Kong Monday.

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

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

Flint said 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.

Analysts said the results had outstripped predictions.

"HSBC's earnings are definitely better than market expectations," said Dickie Wong of Hong Kong-based Kingston Securities.

He described the firm as in "very good shape" after wide-ranging restructuring programmes following the global financial crisis in 2008.

Net profit for the first half of the year rose 10 percent to $6.99 billion from $6.36 billion for the same period in 2016.

Pre-tax profits for the second quarter rose $1.7 billion to $5.3 billion year on year, beating Bloomberg analysts' estimates, which had averaged out at a $4.6 billion forecast.

HSBC announced the appointment of a new chairman in March as part of a management overhaul that will also see it choose a new chief executive to replace Stuart Gulliver, following a massive drop in 2016 profits.

British businessman Mark Tucker, currently group chief executive and president of insurance group AIA, will take over from Flint in October.

Gulliver has said he will step down in 2018.

Gulliver and Flint were grilled by British lawmakers in 2015 and apologised for "unacceptable" failings at HSBC's Swiss division following allegations the unit helped rich clients hide billions of dollars from the taxman.

HSBC was one of six major U.S. and European banks that were fined a total of $4.2 billion by global regulators in a November 2014 crackdown for attempted manipulation of the foreign exchange market.

It was also fined $1.92 billion by U.S. prosecutors in 2012 to settle allegations that it failed to enforce anti-money laundering rules exposing it to exploitation by drug cartels and terrorist organisations.

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