HSBC unveils $3bn in share buybacks despite lower than expected profits

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HSBC has announced up to $3bn in additional share buybacks, taking total buybacks to $7bn this year, as the bank said higher interest rates were continuing to boost its growth.

The move came even as the London-listed lender on Monday reported lower than expected profits for the three months to September. Pre-tax profits were $7.7bn, less than the $8.1bn analysts had estimated, though far higher than the $3.2bn figure a year earlier.

“We have had three consecutive quarters of strong financial performance,” said chief executive Noel Quinn, adding that the bank’s “good broad-based growth” was “supported by the interest rate environment”. HSBC also announced a quarterly dividend of 10 cents a share, its third of that amount this year.

HSBC, one of the world’s largest deposit-taking institutions, has been a big winner from higher interest rates, which have helped it earn more on the difference between what it pays on deposits and what it charges to lend.

The boost to its performance has helped it hand a series of payouts to shareholders, including two $2bn share buybacks this year, at a time when it has been embroiled in a battle with its largest shareholder Ping An.

The Chinese insurer has been pressing for HSBC to be separated into eastern and western units, though shareholders in May rejected a Ping An-backed split proposal at the bank’s annual meeting. Quinn said in August that he had “moved on” from the battle.

Shares in HSBC fell 0.2 per cent in early afternoon trading in Hong Kong following the results announcement.

“After you do several rounds of share buybacks, the impact of doing more starts to diminish,” said Dickie Wong, head of research at Hong Kong-based Kingston Securities. “While HSBC is doing relatively well in terms of earnings, market sentiment is very weak.”

The bank is listed in the UK and Hong Kong…