HSBC sees profit boost, quashes split speculation
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The news: HSBC’s third-quarter profit rose 10% year-over-year to USD8.5 billion ($12.96 billion), surpassing forecasts of USD7.6 billion, aided by growth in wealth and wholesale banking despite volatile market conditions.
The numbers: HSBC announced a new USD3 billion share buyback and an interim dividend of 10 US cents per share, on top of a previously announced USD6 billion repurchase plan.
Revenue increased by 5% year-over-year in the September quarter, reaching USD17 billion. And Greg Guyett, CEO of global banking and markets, was appointed chair of the newly formed strategic clients group.
Shares climbed 2.5% in London to a six-year high, echoing earlier gains in its Hong Kong shares.
The context: Europe’s largest bank last week announced a restructure to streamline operations and cut costs. On Tuesday, the bank kept investors waiting for more details, saying the cost-saving specifics will follow in February.
HSBC's shift to an East-West geographic management structure reignited discussions among some analysts and investors about a potential split, echoing past calls from its former largest investor, China’s Ping An Insurance Group, which pushed for such a move in 2022-23 without success.
But on Tuesday, CEO Georges Elhedery addressed the speculation, stressing the bank’s restructure is not a precursor for a spinoff of its Asia business.
What they said: "[The reorganisation] does not in any way signal our intention to split the group," Elhedery told reporters on a conference call. “The primary reason for the reorganisation is to simplify the bank.”
The sources: Reuters , Bloomberg , South Morning China Post
