HSBC is giving a further $4.8 billion to shareholders, providing a final parting gift from outgoing CEO Noel Quinn. The payout consists of a $3 billion share buyback and $1.8 billion in fresh dividends.
The move is part of Quinn’s strategy to fend off calls to break up the bank, led by its top shareholder, China’s Ping An Asset Management. During his final 18 months in post, Quinn will have paid $34.4 billion to shareholders.
HSBC’s pre-tax profit increased by 1.5% to $8.9 billion in the second quarter, driven by growth in its wealth division and increased demand for investment banking services. Despite an 11% drop in net interest income, the bank increased its forecasts for net interest income for the full year from $41 billion to $43 billion, depending on global interest rates.
HSBC set aside $346 million for potential defaults, lower than the $913 million reserved last year, reflecting improving economic conditions in the UK.
Noel Quinn will hand over the reins to Georges Elhedery, the current chief financial officer, in September. Elhedery will take over as CEO after Quinn’s departure.
The payouts come as HSBC continues to execute its strategy and diversify its revenue streams. The bank remains confident in its ability to deliver attractive returns, even in a lower interest rate environment.