HSBC will buy back up to $1 billion in shares after a 27 percent rise in first-half profits. The bank’s cost-cutting efforts, including the use of artificial intelligence, aim to reduce costs by $2 billion.
The increase in loan losses linked to fraud and real estate has tempered the bank’s overall financial gains.
Following a strong rise in first-half results, British banking giant HSBC announced its intention to buy back shares worth up to $1 billion. This financial boost is due to an increase in commission-related revenues and a rise in net interest income.
CEO Georges Elhedery emphasized that the company is successfully implementing its strategic objectives, combining rigor and speed to become a more solid institution.
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The bank’s financial results showed substantial growth, with profit attributable to shareholders rising by around 27 percent to $14.6 billion in the first six months of the year, compared to $11.5 billion in the previous period.
To reward investors, the board of directors authorized a second interim dividend of 10 cents per share, alongside the share buyback program. This marks a return to share buybacks after a three-quarter hiatus, during which the company focused on rebuilding its capital after the privatization of Hang Seng Bank.
Despite these gains, the bank had to contend with certain setbacks, including $2.4 billion in expected credit losses – an increase of $400 million compared to the first half of 2025.
These losses were partly attributed to a $400 million fraud case involving a British financial investor and $200 million in losses related to the Hong Kong commercial real estate market.
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As part of a broader modernization effort, HSBC is relying on an AI-driven transformation to optimize its processes and has increased its cost-reduction target from $1.5 billion to $2 billion.
The bank is also undergoing an aggressive rationalization of its global presence. Elhedery confirmed 15 market or business exits since last year, including the sale of its retail banking operations in Egypt, the sale of its Singaporean insurance branch to Allianz for $2.1 billion, and the sale to Blackstone of an Australian mortgage loan portfolio worth $25.3 billion.
The bank’s financial results for the second quarter showed a 60 percent increase in pre-tax profit compared to the same period last year, reaching $10.1 billion, thanks to strong results from its wealth management and interest income.
