HSBC Q1 profit drops 25%; launches US$3 billion share buyback

[HONG KONG] HSBC Bank launched a US$3 billion share buyback after reporting a 25 per cent fall in first-quarter profit on Tuesday and warned of heightened business uncertainty in the face of US President Donald Trump’s sweeping global tariffs.

As part of its plan to trim its smaller businesses globally, the bank said it has launched a strategic review of its Malta operations, which is still “at an early stage.”

The London-based bank reported profit before tax of US$9.5 billion in the first quarter. That compared with US$12.7 billion a year earlier and US$7.8 billion average of analyst estimates compiled by the bank.

The bank reported US$900 million in expected credit losses for the quarter, including US$150 million to reflect heightened economic uncertainty, and said it could book an additional US$500 million in a scenario where higher tariffs lead to a slowdown in global growth.

“The macroeconomic environment is facing heightened uncertainty, in particular from protectionist trade policies, creating volatility in both economic forecasts and financial markets and adversely impacting consumer and business sentiment,” HSBC said in its earnings release.

Europe’s biggest bank by market capitalisation left unchanged its performance target of a mid-teens return on average tangible equity for each of the three years from 2025 to 2027, having hit 14.6 per cent in 2024.

The bank is also planning to keep growth in its expenses to 3 per cent in 2025 compared with 2024 costs, and said it was committed to reducing annual costs by US$1.5 billion by end 2026.

HSBC said it is looking to redeploy up to US$1.5 billion of costs from non-core businesses into more strategic activities including wholesale transaction banking and an expansion of its Asian wealth business.

The lender said it will pay its first interim dividend of US$0.10 a share, following a US$0.87 dividend payout last year. REUTERS