HSBC earnings fall on hit from China bank stake

(Sharecast News) - HSBC reported lower-than-expected first half profits as it took a large hit from its stake in China's Bank of Communications. Pre-tax profit fell by $5.7bn to $15.8bn with the BoC charge coming in at $2.1bn. Second-quarter earnings were down 29% year-on-year to $6.3bn, compared with forecasts of $6.99bn, according to consensus figures compiled by the bank.

The bank also announced a $3bn share buyback.

HSBC said it was "well-positioned to manage the changes and uncertainties prevalent within the global environment in which we operate, including in relation to tariffs".

"We have modelled a disruptive tariff scenario that includes significant reductions in policy rates, together with broader macroeconomic deterioration."

However, the lender warned that demand for lending would remain muted for the rest of the year but expected more growth in its wealth division.

"We continue to expect double-digit percentage average annual growth in fee and other income in Wealth over the medium term," it said.

Reporting by Frank Prenesti for Sharecast.com