HSBC's Buyback Might Disappoint as Balance Sheet Grows

Dow Jones
Aug 04

0906 GMT - HSBC Holdings' results show notable growth in the London-based bank's balance sheet, which limited its capital distribution, explaining a smaller-than-expected share buyback of $1 billion, Jefferies's Joseph Dickerson says. HSBC's buyback fell short of the $2 billion Jefferies expected, the analyst says in a research note. The results should lead to modest upgrades to the consensus estimate despite HSBC flagging that it might increase costs this year and next to accelerate initiatives around revenue growth, with incremental cost savings of $500 million offsetting the rise, Jefferies says. An increase in Hong Kong new-to-bank customers should help to allay recent concerns among investors about compliance matters in China, Jefferies says, referring to recent penalties against brokers in the country. Shares in London are up 1.3% at 1,576.60 pence.

 

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