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HSBC Announces Special Dividend And $3 Billion Share Buyback

HSBC Bank (HSBC) has announced a special dividend payment and $3 billion U.S. stock buyback program as its third-quarter profit rose 235% from a year earlier.

The London-based bank said that its Q3 after tax profit amounted to $6.26 billion U.S., up from $2.66 billion U.S. in the same quarter of 2022.

Europe’s largest bank by assets said that its profit boost came mostly from higher interest rates charged on various loans it made.

However, despite the huge increase, the profit figure missed the consensus expectation of analysts who had forecast a Q3 profit of $6.42 billion U.S.

Revenue at HSBC rose to $7.71 billion U.S. in Q3, up 139% from $3.23 billion U.S. a year ago. HSBC also attributed its revenue increase to higher interest rates.

The bank’s net interest margin, which is a measure of lending profitability, stood at 1.70% at the end of Q3, up 19 basis points year-over-year and ahead of estimates that called for 1.68%.

Due to the strong financial results, HSBC’s board of directors approved a special dividend payment of $0.10 U.S. per share.

The bank also said it will initiate a new share buyback program of up to $3 billion U.S., which is to begin immediately and be completed by the end of February 2024.

HSBC has now announced three share buybacks in 2023 totaling $7 billion U.S., as well as three special dividend payouts that total $0.30 U.S. per share.

The stock of HSBC has gained 42% over the last 12 months and currently trades at $36.71 U.S. a share.