HSBC Holdings plc (NYSE:HSBC) posted a stronger-than-expected first-half profit this week and resumed its share buyback program. UBS Group AG (NYSE:UBS) posted its own profit beat, but it's facing a $125 million fine from U.S. regulators. Hedge funds had already been quietly trimming their UBS positions before that fine even became public.
Europe's biggest banks are having a strong earnings season, but HSBC is telling the cleaner story of the two. Its profit beat came from wealth management growth, a resumed buyback, and a raised outlook for net interest income. On the other hand, UBS Group AG (NYSE:UBS) beat estimates too, but its win comes with a catch, i.e., a $125 million fine from U.S. regulators for repeated anti-money-laundering failures, alongside a hedge fund base that had already been quietly pulling back heading into the quarter.
This makes you wonder: does a clean earnings beat matter more to investors than a resolved regulatory problem? Or does UBS's history as a "repeat offender" cast a longer shadow over its recovery than HSBC Holdings plc (NYSE:HSBC)'s cleaner quarter?
First-half profit rose 23% to $19.5 billion, beating the $18.9 billion ***** ysts expected. HSBC Holdings plc (NYSE:HSBC) resumed its buyback with a plan of up to $1 billion after pausing for three quarters to fund its Hang Seng Bank takeover. It also raised its guidance for net interest income to exceed $46 billion. Wealth revenue grew 18%. The bank added 640,000 new clients in the first half. Corporate and institutional banking is now HSBC's biggest income source, generating a third of first-half profit. The bank has more than 70 IPOs lined up across Asia.
However, Citi flagged that the new $1 billion buyback came in well below the $2.2 billion investors expected, raising the question of whether HSBC is permanently scaling back its repurchases. The stock dropped from its own record high right after the earnings release. HSBC is also still exiting several businesses, including its Singapore insurance unit, Egypt retail banking, and Australian mortgages, which is a sign of ongoing restructuring rather than pure growth.
#buyback
Europe's biggest banks are having a strong earnings season, but HSBC is telling the cleaner story of the two. Its profit beat came from wealth management growth, a resumed buyback, and a raised outlook for net interest income. On the other hand, UBS Group AG (NYSE:UBS) beat estimates too, but its win comes with a catch, i.e., a $125 million fine from U.S. regulators for repeated anti-money-laundering failures, alongside a hedge fund base that had already been quietly pulling back heading into the quarter.
This makes you wonder: does a clean earnings beat matter more to investors than a resolved regulatory problem? Or does UBS's history as a "repeat offender" cast a longer shadow over its recovery than HSBC Holdings plc (NYSE:HSBC)'s cleaner quarter?
First-half profit rose 23% to $19.5 billion, beating the $18.9 billion ***** ysts expected. HSBC Holdings plc (NYSE:HSBC) resumed its buyback with a plan of up to $1 billion after pausing for three quarters to fund its Hang Seng Bank takeover. It also raised its guidance for net interest income to exceed $46 billion. Wealth revenue grew 18%. The bank added 640,000 new clients in the first half. Corporate and institutional banking is now HSBC's biggest income source, generating a third of first-half profit. The bank has more than 70 IPOs lined up across Asia.
However, Citi flagged that the new $1 billion buyback came in well below the $2.2 billion investors expected, raising the question of whether HSBC is permanently scaling back its repurchases. The stock dropped from its own record high right after the earnings release. HSBC is also still exiting several businesses, including its Singapore insurance unit, Egypt retail banking, and Australian mortgages, which is a sign of ongoing restructuring rather than pure growth.
#buyback
2 months ago
