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HSBC returns $2bn more to investors

HSBC underpins solid half-year results with a $2 billion (£1.5 billion) extension to its share buyback programme.

HSBC returns $2bn more to investors

HSBC (HSBA) underpinned solid half-year results with news that it would extend purchases of its own shares by $2 billion (£1.5 billion).

The move raises the amount the bank is returning to investors via share buybacks to $5.5 billion so far this year.

The announcement sealed a recovery in the first six months of the year with pre-tax profits up 5% $10.2 billion.

Revenue fell $3.3 billion to $26.2 billion, which HSBC said was 'primarily due to currency translation differences' along with 'fair value movements' on the disposal of its Brazil operations. 

Since the 2008 credit crunch HSBC has cut thousands of roles and sold assets to ensure it can keep paying dividends and remain profitable.  In the first half the bank shaved another $2.2 billion off costs.

'We have had an excellent first half of 2017, reflecting the changes we have made since our investor update in 2015 and the strength of our competitive position,' HSBC chief executive Stuart Gulliver said. 

'Our three main global businesses performed well, increasing profit before tax and growing market share in many of the products that are central to our strategy. We remain on track to complete the majority of our strategic actions by the end of the year.'

The shares gained 17p or 2.2% to 762p. They have risen 16% this year and yield 5.4%. The bank paid paid two interims dividends in the first half, totalling $20 cents a share, the same as last year.

Graham Spooner, investment research analyst at The Share Centre, said: ‘We continue to recommend HSBC as a “buy” for medium risk investors seeking income. We would however, suggest building a holding over time as the company continues to face potential challenges which include political, regulatory and slower global growth.’

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