HSBC Holdings PLC (LSE:HSBA) launched a new US$2bn share buyback and revised guidance upwards as profit in the first half of 2023 more than doubled.
The Asia-focused lender said pre-tax profit in the six months to 30 June 2023 soared to US$21.66bn from US$8.78bn the year before, including a US$1.5bn gain on acquiring the UK arm of Silicon Valley Bank.
Revenue jumped by 50% to US$36.9bn from US$24.6bn, driven by higher net interest income in all businesses due to interest rate rises. Net interest income climbed to US$18.26bn from US$13.39bn.
"There was good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest income, and continued tight cost control," said chief executive officer Noel Quinn.
Reflecting the strong performance, HSBC announced a second interim dividend of US$0.10 per share and a share buyback of up to US$2bn, which is expected to be completed within three months.
The lender has budgeted US$1.3bn for expected credit losses and other credit impairment charges reflecting a "more stable outlook" in most markets, though inflationary pressures persist.
Looking ahead, HSBC raised its guidance for return on tangible equity for 2023 and 2024, now expecting to reach the mid-teens, excluding the effects of material acquisitions and disposals. Back in May, it had guided for "at least" 12%.
It also upped 2023 full-year guidance for net interest income to above US$35bn from a previous forecast of “at least” US$34bn.
The bank's common equity tier 1 capital ratio rose to 14.7% at the end of June, from 14.2% at the end of the fourth quarter of 2022 and above the medium-term target range of 14% to 14.5%.