HSBC return to buybacks underwhelms despite improving earnings momentum

Reaction Finance Written by: Oliver Haill 16:07 Tue 04 Aug 2026 --> Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Oliver Haill Oliver has been writing about companies and markets since the early 2000s, cutting his teeth as a financial journalist at Growth Company Investor with a focusing on AIM companies and small caps, before a few years later becoming a section editor and then head of research. He joined Proactive after a couple of years freelancing, where he worked for the Financial Times Group, ITV, Press Association, Reuters sports desk, the London Olympic News Service, Rugby World Cup News Service, Gracenote... Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. HSBC Holdings PLC ( LSE:HSBA NYSE:HSBC ) View Price & Profile HSBC return to buybacks underwhelms despite improving earnings momentum Published: 16:07 04 Aug 2026 BST HSBC Holdings PLC's (LSE:HSBA, NYSE:HSBC) return to share buybacks was deemed a bit on the small side, despite the Asia-focused lender's stronger-than-expected quarter and improving business momentum. The FTSE 100's largest company announced a $1 billion buyback alongside a 60% rise in second-quarter pre-tax profit to $10.1 billion. It was the first buyback since HSBC paused repurchases to fund its acquisition of the remaining shares in Hang Seng Bank in October. Jefferies analyst Joseph Dickerson called it a "modestly lower buyback than we expected", which "may underwhelm". He had pencilled in $2 billion, a figure he said appeared to match investor expectations, although there was no formal consensus forecast. UBS had also expected $2 billion. Analyst Jason Napier said he was "surprised" the return was not bigger given the strength of HSBC's first-half performance. The disappointment looks more about restrained ambition than weak trading, the analysts suggested. Second-quarter profit excluding notable items beat company-compiled consensus by 5%, as income came in ahead of expectations and operating costs remained in line. Loans increased 5% at constant currency, led by corporate and institutional banking and the UK business. Wealth income excluding net interest income rose 21%, while net new money increased 8%. "The direction of travel for consensus estimates looks to be slightly upwards following a 6% PBT beat in Q2 with notable balance sheet growth," Dickerson said. HSBC also raised expected savings from its restructuring to $2 billion from $1.5 billion. However, management flagged higher variable pay in the second half and investment intended to support revenue growth in 2027. The bank strengthened its interest income guidance only slightly, from "around" $46 billion to "at least" $46 billion, while leaving its longer-term targets unchanged. UBS retained its 'neutral' rating and 1,520p target, noting that HSBC is already valued at 2.2 times tangible book value. Napier said: "In short, HSBC is performing better than consensus forecasts but didn’t deliver the Banking NII or buyback we’d forecast and, with targets unchanged and higher costs flagged won’t, we think, force a market rethink on the financial outlook today." Continue reading