HSBC Reports 29% Q2 Profit Drop Launches $3 Billion Buyback

HSBC, Europe's largest lender, reported a 29% year-on-year drop in second-quarter pre-tax profits to $6.3 billion, primarily due to a $2.1 billion impairment charge related to its investment in China's Bank of Communications and increased credit losses linked to stress in Hong Kong's property sector. The bank's revenue for the first half of 2025 fell by $3.2 billion, reflecting exits from Canada and Argentina, while operating expenses rose 10% driven by restructuring and technology investments. Despite the profit decline, HSBC has initiated a new $3 billion share buyback program, matching a previous buyback, and maintained a 10-cent per share interim dividend. The bank cited macroeconomic uncertainties, including trade disruptions and tariffs, as complicating factors for inflation and interest rate outlooks. HSBC's second-quarter profits also fell short of market expectations, with net profit declining 30% year-on-year, and the dilution of its stake in BoCom to 16% after a special stock issuance by the Chinese government. Executive share purchases and positive analyst outlooks suggest confidence in HSBC's strategic initiatives and future prospects.