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Investing.com-- HSBC Holdings PLC (HK:0005) (LON:HSBA) on Wednesday reported a 27% drop in first-half profit, hit by one-off charges related to its investment in China’s Bank of Communications and the absence of gains from past disposals.
Still, the bank posted higher underlying earnings and announced a fresh share buyback of up to $3 billion.
The British lender said profit before tax fell to $15.8 billion in the six months ended June, down from $21.6 billion a year earlier. The decline reflected a $2.1 billion hit from dilution and impairment losses on BoCom and the non-repetition of $3.6 billion in 2024 disposal gains from its Canada and Argentina units.
Stripping out these items, profit before tax rose 5% on a constant currency basis to $18.9 billion, led by strength in wealth management and markets income. Return on tangible equity, excluding notable items, improved to 18.2% from 17% a year ago.
Revenue fell 9% to $34.1 billion, but rose 6% to $35.4 billion on an adjusted constant currency basis. Net interest income slipped slightly to $16.8 billion, weighed by currency effects and lower interest rates.
CEO Georges Elhedery said the bank made "positive progress" in simplifying operations and is confident in meeting medium-term targets, including a mid-teens RoTE.
"We have modelled a disruptive tariff scenario that includes significant reductions in policy rates, together with broader macroeconomic deterioration," HSBC said in earnings release.
Tariffs are expected to have a limited direct impact on revenue, but broader economic weakness could push RoTE below the mid-teens target in the coming years, it added.
HSBC declared a second interim dividend of $0.10 per share.