HSBC profits surge to $10.1bn 6 as bank resumes $1bn share buyback

The FTSE 100 bank’s pre-tax profit for the second quarter of 2026 was $10.1bn (£7.5bn), up 60 per cent from the $6.3bn secured in the same period last year

HSBC has restarted its share buyback programme after profits exceeded expectations in the second quarter of 2026.

The FTSE 100 lender – whose market capitalisation of £274bn makes it the London Stock Exchange’s most valuable company – reported $10.1bn (£7.5bn) in pre-tax profit for the three-month period, comfortably beating an internal projection of £9.5bn. This represented a 60 per cent increase from the $6.3bn achieved in the corresponding period last year.

The profit boost came as revenues rose 11 per cent to $37.7bn.

Net interest income increased eight per cent to $18.2bn, as the bank reinvested lower-yielding hedges at current higher market interest rates, a tactic known as structural hedging. The group’s net interest margin – a crucial measure of a bank’s lending profitability – rose four basis points to 1.61 per cent.

Fee income, which is prized by banks as a dependable revenue stream due to its independence from interest rates, grew nearly 10 per cent to $7.3bn, as reported by City AM.

This was powered by a strong performance across wealth – a central area of emphasis for chief executive Georges Elhedery – which expanded 20 per cent to $5.5bn.

HSBC announced it would restart share buybacks with a programme of up to $1bn, scheduled to be completed before the firm publishes its third quarter results. The group had previously pressed pause on buybacks following its move to privatise Hang Seng Bank in October 2025.

The blue-chip giant offered to pay HK$155 per share for a 36 per cent stake not already owned by the bank, valuing the holding at HK$106.1bn (£10.7bn).

In the second quarter update, Elhedery raised the bank’s cost-cutting target for the end of 2026 to $2bn, up from the original $1.5bn, which the group said was reached at the start of this year.

It expects to deliver this within the original restructuring budget of $1.8bn.

Elhedery took the reins at the bank just over two years ago and swiftly set about overhauling the group’s operations.

A central pillar of chief executive Georges Elhedery’s restructure has involved dividing the business into “eastern” and “western” markets, encompassing the Asia-Pacific and the Middle East and the Americas and Europe, respectively.

Total headcount across the group has fallen to 206,161, a reduction of 2,559 since the year-end of 2025. City AM revealed last February that the bank was poised to cut a number of investment bankers on the very same day earmarked for bonus payouts.

Subsequent reports confirmed that investment bankers at vice-president level and above received no bonus upon termination.