HSBC Posts 29% Profit Drop, Announces $3B Buyback

HSBC Holdings reported mixed financial results for the first half of 2025, with a 29% drop in pre-tax profit primarily due to a $2.1 billion impairment loss on its investment in China's Bank of Communications, which led to a 4.5% share price decline. Despite this, the bank's core operations performed robustly, with underlying profits exceeding consensus estimates by 10%, supported by strong income across its global trade finance and other core businesses. HSBC declared a $0.50 per ADS interim dividend and announced a $3 billion share buyback plan to enhance shareholder value. The bank's trade finance unit showed resilience amid US tariffs and geopolitical uncertainties, with revenue growth driven by expanded customer support and infrastructure development. Analysts offer mixed views, with some rating the stock as an Outperform and others cautioning about a potential downside based on intrinsic value estimates. HSBC management remains confident, reaffirming mid-teens return on equity guidance and emphasizing the strength of its global footprint and strategic initiatives despite near-term challenges.