Advertisement
Banking & finance
Business

HSBC completes latest round of US$7 billion stock buy-back as market awaits report on bumper 2023 profits

  • HSBC bought back 208.1 million shares from UK trading venues, 179.9 million shares in Hong Kong under a US$3 billion mandate since November 1
  • HSBC’s annual net profit probably surged 76 per cent in 2023, according to consensus estimates; bank is scheduled to report on February 21

Reading Time:2 minutes
Why you can trust SCMP
0
People walking past a HSBC branch along Pedder Street in Central, Hong Kong in May 2023. Photo: Yik Yeung-man
Enoch Yiu

HSBC Holdings, the biggest commercial bank in Hong Kong, has completed a third round of buy-back to defend the stock amid a broader market sell-off, taking the cumulative purchases to US$7 billion since May 2023 as the lender prepares to report a jump in 2023 profits this week.

The UK-based bank spent US$3 billion to buy back 208.1 million of its own shares from UK trading venues at an average price of £6.1158 each, and 179.9 million shares in Hong Kong at HK$60.4624 each, according to a local stock exchange filing on Monday. The purchases were made from November 1 last year.
The bank also repurchased US$2 billion worth of its shares in the previous round from August to October last year, and US$2 billion from May to September 2023 soon after winning the mandate at the annual shareholders’ meeting, according to its filings.
HSBC’s Hong Kong headquarters in Central. Photo: Elson Li
HSBC’s Hong Kong headquarters in Central. Photo: Elson Li

The UK lender, which generates most of its profits in Asia and counts Hong Kong as its single biggest market, rewarded its investors with dividends and accelerated buy-backs after overcoming credit losses incurred during the Covid-19 pandemic years. The bank is scheduled to report its full-year results after a board meeting on February 21.

Net profit probably surged 76 per cent to US$26.1 billion, according to consensus estimates by analysts compiled by Bloomberg, versus US$14.8 billion in 2022 and US$12.6 billion in 2021. Earnings doubled to US$18.1 billion at the halfway mark on June 30, with CEO Noel Quinn raising its full-year guidance for net interest income following several rounds of rate hikes.

“HSBC benefited from a high interest-rate environment last year,” said Kenny Ng Lai-yin, a strategist at Everbright Securities International in Hong Kong. “The growth in interest income is expected to continue” while credit losses remain a matter of concern for investors, he added.

Advertisement