HSBC announces a $2.5 billion share buy-back after profits tumble

HSBC Holdings plc (LON: HSBA) has announced a $2.5 billion share buy-back as it takes steps to soothe investors after a near 30% drop in first-half core profits.

The shares rose 3.5% in London initially before falling down slightly afterwards. The bank also said that they are going to abandon their timetable for achieving a 10% return on equity.

According to Reuters’ banking correspondent, revenues have been hit by sluggish growth in key markets Europe and Hong Kong and there could be more dark clouds on the horizon, including fall-out from the Brexit vote and China’s slowing economy.

HSBC also said it was removing the word progressive from its guidance on dividend, signalling that they don’t expect to continue growing a dividend in the face of global economic uncertainty.

Europe’s banking sector’s been rattled by record low interest rates and rising regulator costs.

Source: Stuart Gulliver, HSBC

Source: Stuart Gulliver, HSBC

HSBC’s CEO Stuart Gulliver shared:

Uncertainty is likely to last for some time.”

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