Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
HONG KONG (AP) — HSBC said Monday it plans to buy back another $2 billion in shares after reporting a strong set of quarterly profits thanks to higher interest rates that helped fatten margins for its lending business.
The London-based global bank, which earns most of its income in Asia, said it will carry out its latest share repurchase in the second half of the year, bringing the total amount since last year to $5.5 billion.
The bank said second-quarter net profit jumped by more than half to $3.87 billion as revenues grew faster than expenses.
For the first half of the year, net profit rose 10 percent to $7 billion as revenue adjusted for currency fluctuations and one-off gains and losses rose 0.8 percent to $26.1 billion.
In Hong Kong, HSBC shares rallied on the news, rising 2.6 percent to their highest in nearly three years.
"We have made an excellent start to 2017," Chief Executive Stuart Gulliver said in a statement. "Our three main global businesses performed well, generating significant increases in both reported and adjusted profit before tax, and gaining market share in many of the products that are central to our strategy."
Chairman Douglas Flint said that as central bank interest rates edged higher, the bank "began to benefit from improved margins on our core deposit bases."
Interest rates in Hong Kong, one of the bank's main markets, have risen in line with the Federal Reserve's two increases this year because the city's currency is pegged to the U.S. dollar.
HSBC is carrying out a sweeping overhaul to increase profitability. That includes shedding thousands of workers and exiting some markets in order to focus even more on Asia. It has also tapped an outsider for the first time to be its next chairman, with Flint to be replaced later this year by AIA Group's Mark Tucker.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.