Michael Makdad, senior equity analyst at Morningstar, looks back on HSBC's interim earnings, and how some of the broader pressures in the global economy are affecting the banking sector.
HSBC Holdings PLC (LSE:HSBA) shares neared the session close down 2.3% at 943.5p after a volatile session, but recovered some earlier losses as investors digested the latest quarterly update. UBS described the results as better than expected beneath the surface, with adjusted pre-tax profit 10% above consensus when excluding a hefty $2.1 billion writedown on HSBC's stake in China's Bank of Communications (BoCom) and higher restructuring costs.
HSBC posts a 29% drop in Q2 pre-tax profit on surging credit losses and costs, but announces a $3B share repurchase plan.
Danone S.A. (OTCQX:DANOY) H1 2025 Earnings Call July 30, 2025 5:30 AM ET Company Participants Georges Bahjat Elhedery - CEO, Member of the Group Management Board & Executive Director Manveen Pam Kaur - Group CFO & Executive Director Conference Call Participants Amandeep Singh Rakkar - Barclays Bank PLC, Research Division Benjamin Toms - RBC Capital Markets, Research Division Gurpreet Singh Sahi - Goldman Sachs Group, Inc., Research Division Jiahui Yan - China International Capital Corporation Limited, Research Division Joseph Dickerson - Jefferies LLC, Research Division Katherine L.
HSBC Holdings PLC (LSE:HSBA) shares fell over 4% after the bank reported a 29% plunge in second-quarter profit, but still unveiled another $3 billion share buyback and $0.10 quarterly dividend. Profit before tax came in at $6.3 billion for the second quarter, down $2.6 billion year-on-year due to a $2.14 billion impairment charge relating to a longstanding investment in China 'associate' Bank of Communications (BoCom) and exposure to the Hong Kong real estate market, which led to expected credit losses rising $900 million to $1.9 billion.
Share repurchases and dividends remain central to the investment thesis, supporting shareholder returns and signaling management confidence. The recent surge in the stock price prompts caution, driven by share buybacks, creates doubts over growth in newly reallocated net fee income and stability in its net interest income. Key risks include macroeconomic headwinds and sector-specific challenges such as falling interest rates and neobanks adoption.
Neils Christensen has a diploma in journalism from Lethbridge College and has more than a decade of reporting experience working for news organizations throughout Canada. His experiences include covering territorial and federal politics in Nunavut, Canada.
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