HSBC reports Q2 EPS 34c vs. 26c last year

Reported profit before tax increased by $4.1B to $8.8B; Revenue rose by $4.5B to $16.7B, with growth across all of our global businesses, primarily reflecting interest rate rises. There were good performances in insurance in WPB and in Debt Capital Markets in GBM, which offset reductions in Global Foreign Exchange and Equities. NIM of 1.72% increased by 3bps, compared with 1Q23. ECL of $0.9B increased by $0.5B. ECL in 2Q23 included $0.3B of charges in the commercial real estate sector in mainland China, and $0.3B in the UK, mainly in CMB. Operating expenses of $7.9bn fell by $0.1B. This was driven by lower restructuring and other related costs following the completion of our cost-saving programme at the end of 2022 and the reversal of historical asset impairments. This reduction was partly offset by $0.2B of severance costs incurred in 2Q23, as well as higher technology spend, an increase in our performance-related pay accrual and the effects of rising inflation. Common equity tier 1 capital ratio of 14.7% increased by 0.5 percentage points compared with 4Q22. Noel Quinn, Group Chief Executive, said: “We have delivered a strong first half performance and are confident of achieving our revised mid-teens return on tangible equity target in 2023 and 2024. There was good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest income, and continued tight cost control. I am also pleased that we can reward our shareholders with a second interim dividend of $0.10 per share and a second share buy-back in 2023 of up to $2bn, with substantial further distribution capacity still expected ahead. There is still much work to do, especially given the many challenges in the global economy, but I am confident about the future as we move further into the next phase of our strategy and focus on opportunities to drive value creation, diversify our revenue and retain tight cost control.”