HSBC said profit fell 45 per cent in the second quarter, missing analysts’ forecasts. The company announced a $2.5 billion share buyback before year-end.
Pretax profit fell to $3.61bn from $6.6bn a year earlier, Europe’s largest bank said in a statement Wednesday. That compared with the $3.9bn average estimate of 14 analysts compiled by the lender.
HSBC is contending with slowing economic growth in China and the prospect of a recession in the UK, amid a programme to eliminate thousands of jobs and redeploy as much as $150bn of assets in Asia.
Chief executive Stuart Gulliver, 57, and chairman Douglas Flint, 61, the longest-serving pairing at a big European bank, are nearing the end of their terms as Flint prepares to step down next year, with his replacement starting the search for a new CEO.
Since 2011, HSBC has slashed more than 87,000 jobs, exited at least 80 businesses and reduced the bank’s vast global footprint to 71 countries and territories from 88. Alongside most other European banks, executives have been struggling to boost profitability in the face of record-low interest rates, misconduct fines and rising regulatory costs. That task has been made more difficult with the UK economy projected to slow after the country voted to leave the European Union.
In June last year, Gulliver detailed a new strategy to cut risk-weighted assets by about $290bn, about a quarter of the bank’s total, while redeploying $100bn to $150bn of them to Asia.
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