HSBC Holdings Plc reported Wednesday that its pretax profit had fallen 45 percent to $3.61 billion from a year earlier. For the first six months of the year, HSBC logged a pre-tax profit of $9.71 billion, down 28.7 percent from $13.62 billion in the same period a year earlier and the $10 billion figure estimated by analysts.
The central bank announced a $2.5 billion share buyback for this year as Chief Executive Officer Stuart Gulliver tries to reverse a stock slump, while pulling away from annual dividend increases and the timeline for a key profitability target.
Gulliver wrote in a statement that the bank had performed "reasonably well in the first half in the face of considerable uncertainty," and that the reduction in profit reflected what had been a strong first half in 2015.
HSBC's interim shareholder payout came to 31 cents per share, comprising the fourth interim dividend and the first of 2016.
Possible Recession
HSBC continues to deal with the prospect of a recession in the U.K., amid a program to eliminate thousands of jobs and redeploy as much as $150 billion of assets to Asia. Slowing economic growth in China is adding to the bank’s concerns.
In the last 5 years, HSBC has slashed more than 87,000 jobs, exited at least 80 businesses and reduced the bank’s vast global presence from 88 countries and territories to 71. Bank executives have been struggling to boost profitability in the face of record-low interest rates, misconduct fines and rising regulatory costs. These endeavors have been made more difficult with the U.K. economy projected to slow after the country voted to leave the European Union.