Banking giant HSBC announced on Wednesday that pre-tax profit in the first half of 2024 was $21.6 billion, slightly below the previous year’s record result.

“After delivering record profits in 2023, we again had strong earnings performance in the first half of 2024, which is further proof that our strategy is working,” said Noel Quinn, the group’s outgoing CEO.

The bank also doubled its share buyback, announcing another three-month buyback worth up to $3 billion, after announcing a completed $3 billion share buyback last quarter.

The buyback and approval of an interim dividend of $0.1 per share would generate a total of $4.8 billion in proceeds for shareholders, bringing the total amount of capital distributed since 2023 to $34.4 billion, Quinn said in the statement.

“We remain convinced that we can generate attractive returns even in a low interest rate environment,” he added.

“For this reason, we are issuing a new forecast that equates to an average return on equity in the mid-double-digit range (excluding significant items) in 2025.”

– ‘Reduced sensitivity’ –

The Asia-focused lender and its competitors benefited from rising interest rates at the beginning of this year.

Although a record profit was achieved in 2023, this was followed by a decline in pre-tax profit of almost two percent to 12.7 billion dollars.

The bank generates the majority of its revenue in Asia and has been focusing on the region for several years, aiming to grow its wealth management business and target fast-growing markets.

A $400 million increase in revenue in the first half of 2024 was primarily due to higher net interest income in banking, as well as the divestiture of the bank’s operations in Canada, Argentina and France and the acquisition of the UK arm of Silicon Valley Bank.

“Looking ahead, interest rate developments and election outcomes will be among the factors that will shape the global business environment,” Quinn noted.

“Although we expect a cautious approach, we have reduced our interest rate sensitivity.”

However, the outgoing boss stressed that the group had become more immune to the downside risks from interest rate cuts by diversifying its earnings from businesses such as asset management – particularly in Asia – which attracted a net $32.4 billion in new assets.

– Quinn’s farewell –

HSBC announced earlier this month that its chief financial officer Georges Elhedery will take on the role of chief executive in September.

Quinn, 62, noted in his final interim report “what an enormous privilege it has been to lead this great institution,” where he served for 37 years.

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During his nearly five years in office, Quinn has overseen the restructuring of the London-based lender, helping to increase profits through cost-cutting and rapidly rising interest rates.

In the wake of the pandemic, he implemented a major restructuring program, cutting thousands of jobs to focus on HSBC’s most profitable areas in Asia and the Middle East.

However, profits later fell sharply due to bad debts related to Russia’s invasion of Ukraine. However, they recovered after international banks raised interest rates after central banks took similar measures to combat rising inflation.

Last year, Quinn led efforts to fend off a bid by major shareholder Ping An to spin off its Asian assets, but the proposal was ultimately rejected by shareholders.

The demerger offer highlighted HSBC’s precarious position amid tensions between the US and China. Some observers question whether Europe’s largest bank can continue to maintain its role between East and West.

“My goal when I took this job was to deliver financial performance consistent with our reputation. I believe we have accomplished this by working together and creating a strong platform for growth,” Quinn wrote in the report.

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