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HSBC announces $2 billion share buyback as rising interest rates boost earnings

HSBC plans to buy back up to $2 billion of its shares to bolster investor support as its largest shareholder, Ping An, mounts criticism of the London-based lender.

Bank pre-tax profits soared to $12.9 billion in the first three months of the year, more than triple the year-ago level and beat analyst expectations of $8.6 billion, paving the way for greater capital returns to shareholders. opened. Shares in London rose 5% after Tuesday’s filing.

The surge in profits is partly due to £1 bailout for the British army of lender Silicon Valley Bank, which filed for bankruptcy in March.

HSBC also reversed a $2.1 billion impairment charge related to the planned sale of its French retail banking network to private equity firm Cerberus.Bank warned last month The deal, which was agreed in 2021, was questionable because a significant rise in interest rates meant private equity buyers would have to inject more capital.

The bank reported a 13% increase in revenue from transactions to $2.4 billion. As Hong Kong reopened after lifting Covid-19 restrictions, it cut provisions for potential bad debts due to Hong Kong’s “improved economic assumptions.”

“Results look strong. exceeded typical equity Tier 1 ratios and exceeded regulatory requirements by a margin.

HSBC It also said it would return to paying quarterly dividends in response to key demand from Hong Kong’s retail investor base. The company said he set the dividend at 10 cents per share and will pay a special dividend once his $10 billion sale of his Canadian business is completed next year.

Such a proposal is essential for HSBC to secure broader investor support and fend off increasingly hostile demands from its largest shareholder, Ping An. The Chinese insurer said last month it was “deeply concerned about HSBC” and has spent the past year doing so. Asking Banks to Split and Split Asian Businesses.

Chief Executive Noel Quinn said the findings showed HSBC was “fulfilling its promise”. He added that HSBC and Ping An had a “common desire to improve the bank’s performance” but had “differences of opinion” over the restructuring.

The lenders are expected to meet with shareholders at the annual general meeting in the UK on Friday.

Bank revenues increased 64% to $20.2 billion on rising interest rates.

HSBC is one of the world’s largest depository institutions and is particularly sensitive to central bank policy. The net interest margin (the difference between interest received from loans and interest paid to depositors) rose to 1.69%.

The results were announced the day after the fall of the First Republic. This is the second-largest bank failure in U.S. history and his third in less than two months that the U.S. Federal Deposit Insurance Corporation has bought a bank.

“I don’t think a global banking crisis is imminent,” Quinn said, adding that he was “glad we had a solution” with JPMorgan Chase. agree to purchase Most of the business of the First Republic.

In March, HSBC bought SVB’s UK business for £1, in a fire sale agreed after a weekend of intense negotiations.since then Hired over 40 commercial bankers who worked at SVB.

Quinn said HSBC had plans to expand its SVB division in Hong Kong, other parts of Asia and possibly Israel.

Ping An, which owns about 8% of HSBC’s stake, said last month that the company’s proposed spin-off should be “aligned with a strategic restructuring solution” in which HSBC would remain the controlling shareholder of another listed Asian bank. said there is.

But the company’s year-long campaign has so far failed to garner support from other major institutional investors.

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HSBC plans to buy back up to $2 billion of its shares to bolster investor support as its largest shareholder, Ping An, mounts criticism of the London-based lender.Bank pre-tax profits soared to $12.9 billion in the first three months of the year, more than triple the year-ago level and beat analyst expectations of $8.6 billion, paving the way for greater capital returns to shareholders. opened. Shares in London rose 5% after Tuesday’s filing.The surge in profits is partly due to £1 bailout for the British army of lender Silicon Valley Bank, which filed for bankruptcy in March.HSBC also reversed a $2.1 billion impairment charge related to the planned sale of its French retail banking network to private equity firm Cerberus.Bank warned last month The deal, which was agreed in 2021, was questionable because a significant rise in interest rates meant private equity buyers would have to inject more capital.The bank reported a 13% increase in revenue from transactions to $2.4 billion. As Hong Kong reopened after lifting Covid-19 restrictions, it cut provisions for potential bad debts due to Hong Kong’s “improved economic assumptions.”“Results look strong. exceeded typical equity Tier 1 ratios and exceeded regulatory requirements by a margin.HSBC It also said it would return to paying quarterly dividends in response to key demand from Hong Kong’s retail investor base. The company said he set the dividend at 10 cents per share and will pay a special dividend once his $10 billion sale of his Canadian business is completed next year.Such a proposal is essential for HSBC to secure broader investor support and fend off increasingly hostile demands from its largest shareholder, Ping An. The Chinese insurer said last month it was “deeply concerned about HSBC” and has spent the past year doing so. Asking Banks to Split and Split Asian Businesses.Chief Executive Noel Quinn said the findings showed HSBC was “fulfilling its promise”. He added that HSBC and Ping An had a “common desire to improve the bank’s performance” but had “differences of opinion” over the restructuring.The lenders are expected to meet with shareholders at the annual general meeting in the UK on Friday.Bank revenues increased 64% to $20.2 billion on rising interest rates.HSBC is one of the world’s largest depository institutions and is particularly sensitive to central bank policy. The net interest margin (the difference between interest received from loans and interest paid to depositors) rose to 1.69%.The results were announced the day after the fall of the First Republic. This is the second-largest bank failure in U.S. history and his third in less than two months that the U.S. Federal Deposit Insurance Corporation has bought a bank.”I don’t think a global banking crisis is imminent,” Quinn said, adding that he was “glad we had a solution” with JPMorgan Chase. agree to purchase Most of the business of the First Republic.

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In March, HSBC bought SVB’s UK business for £1, in a fire sale agreed after a weekend of intense negotiations.since then Hired over 40 commercial bankers who worked at SVB.Quinn said HSBC had plans to expand its SVB division in Hong Kong, other parts of Asia and possibly Israel.Ping An, which owns about 8% of HSBC’s stake, said last month that the company’s proposed spin-off should be “aligned with a strategic restructuring solution” in which HSBC would remain the controlling shareholder of another listed Asian bank. said there is.But the company’s year-long campaign has so far failed to garner support from other major institutional investors.
https://www.ft.com/content/a486acf2-ee89-4b0b-8ef4-4cbefd309269 HSBC announces $2 billion share buyback as rising interest rates boost earnings

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