HSBC fails to impress with US$2 billion share buy-back and first-quarter financial results
It set aside US$897 million in relation to the US inquiry about its sale of mortgage-backed securities during the financial crisis
HSBC Holdings’ US$2 billion stock buy-back plan, the only one planned in 2018, failed to impress investors after Europe’s biggest bank delivered first-quarter financial results that were largely in line with expectations.
The bank’s shares tumbled in Friday afternoon trading after earnings were announced, ending the day 3.7 per cent lower at HK$74.85, marking the biggest single-day decline since February 2017.
Pre-tax profit fell 4 per cent to US$4.8 billion for the quarter ended March, due to a 13 per cent increase in operating expenses from investments in digitalisation and expansion, according to the bank, which was founded in British Hong Kong more than a century ago in 1865.
Revenue increased 6 per cent to US$13.7 billion, driven by higher deposit margins, growth in retail banking, wealth management and commercial banking in Asia.
“Our primary focus is to grow the businesses safely, and we have increased investment to deliver that aim,” Chief Executive John Flint said in a statement.
The bank’s net interest income rose 2.6 per cent from a year ago to US$7.456 billion, with the net interest margin rising 4 basis points from last year, HSBC said.