HSBC Shares Open Lower Despite Profit Surge and Fresh Buyback

Shares in HSBC Holdings (LON: HSBA) opened lower on Tuesday, even as the banking giant posted a sharp rise in first-half profit and announced a new share buyback.

The London-listed lender reported pre-tax profit of $19.5bn for the first six months of 2026, up 23% year-on-year, boosted by a $2.2bn favourable swing in notable items compared with last year, when HSBC took a $2.1bn hit from its Bank of Communications stake.

Revenue climbed 11% to $37.7bn, driven by stronger net interest income and robust fee growth in Wealth and Wholesale Transaction Banking.

Profit after tax rose 23% to $15.3bn, while annualised return on tangible equity reached 18.2%, or 19.1% excluding notable items. The board declared a second interim dividend of $0.10 per share and unveiled plans for a share buyback of up to $1bn, expected to complete by third-quarter results.

However, some investors appeared cautious despite the headline beat. The bank’s CET1 capital ratio fell to 14.1% from 14.9%, reflecting the impact of the Hang Seng Bank privatisation, dividends and higher risk-weighted assets.

Expected credit losses rose to $2.4bn, including a $0.4bn fraud-related charge tied to a UK financial sponsor exposure, alongside continued Hong Kong commercial real estate concerns.

CEO Georges Elhedery said HSBC was “becoming the stronger bank we set out to build,” pointing to growth in Hong Kong, deepening Wealth momentum, and progress on AI and tokenised deposit initiatives.

The bank reaffirmed its 17%-plus RoTE target through 2028 and raised full-year banking net interest income guidance to “at least $46bn.”