HSBC reports $9.48-billion profit, sticks with share buybacks

HSBC Holdings Plc announced a fresh buyback for shareholders despite an increasingly fragile geopolitical backdrop that has weighed on the global economy and markets.

The London-headquartered lender said Tuesday that it will buyback $3 billion and reported a pretax profit of $9.48 billion for the first quarter, surpassing a company-compiled estimate of $7.83 billion.
“Our strong results this quarter demonstrate momentum in our earnings, discipline in the execution of our strategy and confidence in our ability to deliver our targets,” Chief Executive Officer Georges Elhedery said in the earnings statement.

“We continue to support our customers through this period of economic uncertainty and market unpredictability, which we enter from a position of financial strength.”
HSBC is the world’s largest trade bank and a linchpin of commerce between the East and the West. As the largest non-US clearer of dollars, it’s highly exposed to the growing rift between Washington and Beijing that has seen the US and China slap steep tariffs on each other’s exports.
“HSBC business model has become a casualty of shifting geopolitical dynamics,” Tomasz Noetzel and Francis Chan at Bloomberg Intelligence wrote in a note this month.

“The escalation in US-China tensions and an uncertain rates trajectory have amplified revenue growth concerns.”
Shares of the British lender, which were trading close to an all-time high at the start of March, tumbled almost 25% before recouping some of those losses as global financial markets were roiled in the days leading up to and following US President Donald Trump’s April 2 “Liberation Day” launch of a series of tariffs against trading partners.

Under Elhedery, HSBC has embarked on a broad restructuring of its business that is expected to lead to cost savings of $1.8 billion over the next two years.

Billions more will be spent redeploying resources from lower-returning units to areas where the bank believes it has a better chance of making more money.