HSBC Announces $3 Billion Share Buyback Amid Profit Decline

HONG KONG: Following a reported 25% decrease in first-quarter profits, HSBC has initiated a $3 billion share repurchase program. The financial institution cited increased business uncertainty stemming from US President Donald Trump’s widespread global tariffs as a contributing factor to the profit downturn.

The bank has also commenced a strategic assessment of its Malta operations, which is currently in its preliminary stages, as part of a broader strategy to streamline its smaller international business units.

The London-headquartered bank disclosed a pre-tax profit of $9.5 billion for the first quarter, a figure lower than the $12.7 billion recorded in the corresponding period last year and the $7.8 billion average predicted by analysts.

HSBC reported expected credit losses amounting to $900 million for the quarter, which incorporates $150 million to account for amplified economic uncertainty. Furthermore, the bank indicated that it might allocate an additional $500 million if escalating tariffs lead to a global economic slowdown.

In its earnings announcement, HSBC stated that the macroeconomic landscape is facing greater unpredictability, notably from protectionist trade policies. This is generating instability in both economic projections and financial markets, thereby negatively impacting consumer and business confidence.

The financial institution, which is the largest in Europe based on market capitalization, has maintained its objective of achieving a mid-teens return on average tangible equity for the three-year period spanning from 2025 to 2027, after achieving 14.6% in 2024.

HSBC is considering the possibility of outsourcing certain fixed income trading activities, according to Bloomberg.

The bank intends to limit expense growth to 3% in 2025 compared to 2024 expenditures and remains dedicated to decreasing annual costs by $1.5 billion by the close of 2026.

HSBC is aiming to reallocate as much as $1.5 billion in expenses from non-core business segments to more strategic endeavors, including wholesale transaction banking and the expansion of its wealth management business in Asia.

The lender announced that it will distribute its inaugural interim dividend of $0.1 per share, following a dividend payment of $0.87 last year.