HSBC Holdings Plc announced a fresh stock buyback and raised its cost-cutting target as it reported second-quarter earnings that beat estimates.
The London-headquartered lender will repurchase as much as $1 billion in stock after pretax profit for the three months through June rose to $10.1 billion, beating estimates. Results were bolstered by notable items alongside gains in banking and wealth revenue.
“The results as a whole are demonstrating that we are becoming the stronger bank that we set out to build,” Chief Executive Officer Georges Elhedery said in an interview with Bloomberg TV.
Since taking the helm, Elhedery has accelerated an overhaul of Europe’s largest bank through asset sales and operational simplification, including slashing the number of members in the operating committee and managing director positions. HSBC now expects its restructuring effort to yield $2 billion in total cost savings, up from an earlier target of $1.5 billion.
The lender has exited 15 non-strategic businesses since 2025 and announced three sales in the past days, including striking a deal to sell its Singapore insurance unit to Allianz SE for S$2.7 billion ($2.1 billion).
“We are doing a review at pace of those activities that are either low returning or non-strategic and we expect to be able to reach our target profile and our target geographical footprint relatively shortly,” Elhedery said.
The bank will consider boosting its bonus pool for bankers if strong performance continues into the second half, Elhedery said during a call with media discussing the earnings. HSBC’s variable pay pool makes up about 10 percent of total costs and therefore an upward adjustment would have a “modest impact” on overall costs.
Elhedery also said he was tracking how much the bank and its employees are spending on artificial intelligence tools. HSBC has “enormous appetite to continue investing in this space”, he said, cautioning it would be done “strategically”.
The resumption of stock repurchases follows a pause announced in October of last year, when HSBC signaled it would halt buybacks for about three quarters to accommodate its roughly $14 billion deal to take Hang Seng Bank private.
HSBC shares have touched record highs in recent weeks, rebounding from a June slump.
The shares fell 0.7 percent to HK$167.1 ($21.3) in Hong Kong trading, paring this year’s gain to 36.5 percent. Shares in London were broadly flat in early trading.
Wealth inflows slowed to $25 billion during the second quarter, from $39 billion in the first three months but were flat compared to a year ago. The bank also reported provisions of $1.1 billion, including charges related to the Hong Kong commercial real estate sector, while upgrading its banking net interest income guidance for 2026 to at least $46 billion.
Elhedery has placed HSBC’s wealth unit at the center of the bank’s transformation strategy, frequently highlighting the growing importance of Hong Kong as a regional wealth management hub.
Last week, rival Standard Chartered Plc reported better-than-estimated second-quarter profit and a record first-half performance driven by its expanding wealth business, allowing the lender to announce a new $1 billion share buyback.
