HSBC first-half profit jumps 23% to $19.5bn, announces $1bn buyback

HSBC Holdings reported a 23% jump in first-half pretax profit to $19.5 billion, beating the $18.9 billion average analyst estimate. The result was driven by higher net interest income and a strong performance in wealth management, particularly in Hong Kong. The bank also announced a $1 billion share buyback, its first since taking Hang Seng Bank private, and declared a second interim dividend of $0.1 per share.

Profit beat

Pretax profit for the six months to June 30 rose from $15.8 billion a year earlier. Second-quarter pretax profit climbed 60% to $10.1 billion, above analyst forecasts. Revenue in the quarter reached $19.1 billion, up 16% on the same period last year, against a company-compiled consensus of $18.6 billion.

The gains were partly offset by higher expected credit losses and increased operating expenses, the bank said.

Wealth management drives growth

Fee income from wealth management and banking services was a key driver. HSBC's wealth and insurance business, centred on its "second home market" of Hong Kong, boosted profits. The bank retained its target of a return on tangible equity of 17% or higher for the next three years and upgraded its 2026 banking net interest income outlook from "around" to "at least" $46 billion.

Strategic overhaul

Under chief executive Georges Elhedery, HSBC has been simplifying its operations. Last month it sold its $25.3 billion Australian mortgage and personal loan book to a Blackstone-backed group, and its Singapore insurance business to Allianz for $2.1 billion, which will net a pre-tax gain of $1.8 billion. The bank also began marketing risky loans made by Hang Seng Bank after taking full control earlier this year.

Elhedery said the bank was executing its priorities with "pace, precision and discipline."

HSBC is becoming the stronger bank we set out to build. We are executing our strategic priorities with pace, precision and discipline. This is allowing our four businesses to focus on their core strengths, grow, work together more effectively and deepen customer relationships. The result is a bank capable of achieving more.

Shareholder returns

The $1 billion buyback plan marks a resumption of capital returns after the Hang Seng Bank privatisation, which was announced in October 2025. HSBC also declared a second interim dividend of $0.1 per share, matching the payout made in May.

Outlook

The updated net interest income guidance signals confidence in the rate environment. With wealth management momentum and cost-cutting measures, HSBC aims to sustain returns above its 17% target through 2028.