HSBC launches $3 billion buyback after strong Q1 earnings

[WORLD] HSBC, Hong Kong’s largest bank, has announced a new US$3 billion share buyback following first-quarter results that exceeded analysts’ expectations. The move signals the bank’s confidence in its capital strength and continued focus on rewarding shareholders, despite ongoing economic challenges. It marks HSBC’s third major repurchase initiative since early 2023, bringing total buybacks to more than US$7 billion over the past 15 months. Analysts say the program highlights the bank’s strategy to fine-tune its balance sheet amid volatile interest rates and geopolitical headwinds.

Net profit for the first quarter fell 32 per cent year-on-year to US$6.93 billion, or 39 US cents per share, the London-based lender reported in a stock exchange filing. The decline was widely anticipated due to a one-off gain from the sale of its Canadian business in the same period last year. Even so, earnings surpassed the US$5.39 billion average forecast by analysts surveyed by Bloomberg.

The divestment of HSBC’s Canadian unit in late 2022 delivered a US$5.4 billion windfall, skewing year-on-year comparisons. Stripping out this one-time effect, the bank delivered solid underlying results, especially in Asia, where revenue rose 6 per cent. The region remains central to HSBC’s strategic pivot, as it seeks to tap growth in wealth management and cross-border trade flows across Asia.

Pre-tax profit dropped 25 per cent to US$9.5 billion, but still beat the consensus estimate of US$7.83 billion.

This better-than-expected performance was supported by resilient net interest income, which held steady at US$8.7 billion despite rising funding costs. HSBC also benefited from tighter cost controls, reducing operational expenses by 2 per cent. Chief Executive Noel Quinn credited the results to “disciplined execution,” striking a balance between investment in growth and operational efficiency—an ongoing challenge across the global banking sector.

Investors responded positively, with HSBC shares gaining nearly 3 per cent in early trading in Hong Kong. Market sentiment was buoyed by the bank’s robust capital position, including a common equity tier 1 (CET1) ratio of 14.6%, well above regulatory thresholds. This cushion allows HSBC to maintain its shareholder returns strategy while remaining resilient against macroeconomic uncertainty.

Looking ahead, analysts remain focused on HSBC’s exposure to China’s troubled property market, a key area of concern. The bank has provisioned US$400 million for potential credit losses but expressed cautious optimism about signs of regional stabilization. Its performance in upcoming quarters will likely hinge on maintaining growth momentum in core Asian markets while navigating sector-specific risks.