Europe’s biggest lender HSBC Holdings (NYSE:HSBC) has announced its half yearly earnings reports as it posted 5% increase in profits in the first six months of 2017.
HSBC reported a pre-tax profit of $10.2 billion for the first two quarters, up by around $500 million.
As predicted, the lender has also announced a share buyback of up to $2 billion which it expects to close by the end of 2017.
Meanwhile HSBC’s stock price has surged in the past year, aided by the weak pound which makes profits earned abroad more expensive when repatriated to the UK.
Ever since the 2008 financial crisis, HSBC has been slashing jobs and selling assets to make the group more lucrative 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 lender has used share buybacks to counterbalance the impact of shares being paid out as dividends.
The declaration takes the total of HSBC share buybacks since the July of last year to reach $5.5 billion.
Over the last year, HSBC’s stock price has surged from less than 500p to 743p.
“Like many of the other banks, HSBC has topped modest expectations,” said Peter Hahn, of the London Institute of Banking and Finance.
The banking giant also said it spent almost $500m on splitting its retail from its investment banking arm, which it described as “one of the largest projects ever undertaken by the group”.
Furthermore HSBC Holdings (HSBC) announced that its new Birmingham headquarters for its UK retail business will start operation in July 2018.
“The ring-fence is a big expense creating lots of uncertainty,” said Mr. Hahn. “It’s not just the headquarters, it’s separating lots of the systems in the bank.”