HSBC H1 Profit Jumps 23%, Announces $1 Billion Share Buyback and Reaffirms 2028 Targets

HSBC (LON: HSBA) (HK: 0005) reported a strong set of first-half results, with profit rising 23% year-over-year as higher net interest income and robust wealth management fees offset an increase in credit impairment charges. The Asia-focused banking giant also announced a new $1 billion share buyback and reaffirmed its medium-term profitability and revenue growth targets.

For the six months ended June 30, HSBC posted profit before tax of $19.5 billion, up from $15.8 billion a year earlier, while revenue climbed 11% to $37.7 billion. Second-quarter pre-tax profit surged 60% to $10.1 billion, reflecting stronger customer activity across key business segments.

The lender attributed the improved performance to higher banking net interest income, increased fee income from wealth management, and solid growth in wholesale transaction banking. However, expected credit losses rose to $2.4 billion, compared with $2.0 billion in the same period last year.

The higher impairment charges included a $400 million fraud-related securitisation exposure in the UK, provisions linked to Hong Kong’s commercial real estate market, and additional allowances tied to the ongoing conflict in the Middle East.

HSBC declared a second interim dividend of $0.10 per share and confirmed plans to repurchase up to $1 billion of its shares before releasing third-quarter earnings, underscoring confidence in its capital position and future earnings outlook.

Looking ahead, the bank maintained its guidance for a return on average tangible equity (RoTE) of at least 17% in 2026, 2027, and 2028, excluding notable items. It also reaffirmed its commitment to year-over-year revenue growth through 2028 and a 50% dividend payout ratio.

In addition, HSBC raised its outlook for banking net interest income, now expecting at least $46 billion in 2026, supported by a more favorable interest-rate environment. The bank continues to forecast credit losses at around 45 basis points of average customer loans and expects operating expense growth of approximately 1% this year.