HSBC Q3 profit up 74%, beats estimates, announces up to US$2b buyback

[SINGAPORE] HSBC Holdings reported a 74 per cent rise in third quarter profit, beating market expectations, as the Asia-focussed bank released cash set aside for expected bad loans that have not materialised.

The bank posted pretax profit of US$5.4 billion for the quarter to September, versus US$3.1 billion a year earlier and the US$3.78 billion average estimate of 14 analysts compiled by HSBC.

HSBC also announced a share buyback of up to US$2 billion, as it continues to return excess capital to shareholders in place of investing the cash in its businesses.

HSBC released US$700 million in cash it had put aside in case pandemic-related bad loans spiked, as opposed to the same time a year ago when it took an $800 million charge in expectation of such soured debts.

In reality economic conditions have improved while loans have performed better than expected, the bank said.

The results from the London-headquartered bank come as rivals such as Citigroup are riding a M&A boom, while fending off weakness in the lending business.

REUTERS