By Selena Li and Lawrence White
HONG KONG (Reuters) -HSBC launched a $3 billion share buyback after reporting a 25% fall in first-quarter profit on Tuesday and warned of heightened business uncertainty in the face of U.S. President Donald Trump’s sweeping global tariffs.
As part of its plan to trim its smaller businesses globally, the bank said it has launched a strategic review of its Malta operations, which is still “at an early stage.”
The London-based bank reported profit before tax of $9.5 billion in the first quarter. That compared with $12.7 billion a year earlier and $7.8 billion average of analyst estimates compiled by the bank.
The bank reported $900 million in expected credit losses for the quarter, including $150 million to reflect heightened economic uncertainty, and said it could book an additional $500 million in a scenario where higher tariffs lead to a slowdown in global growth.
“The macroeconomic environment is facing heightened uncertainty, in particular from protectionist trade policies, creating volatility in both economic forecasts and financial markets and adversely impacting consumer and business sentiment,” HSBC said in its earnings release.
Europe’s biggest bank by market capitalisation left unchanged its performance target of a mid-teens return on average tangible equity for each of the three years from 2025 to 2027, having hit 14.6% in 2024.
The bank is also planning to keep growth in its expenses to 3% in 2025 compared with 2024 costs, and said it was committed to reducing annual costs by $1.5 billion by end 2026.
HSBC said it is looking to redeploy up to $1.5 billion of costs from non-core businesses into more strategic activities including wholesale transaction banking and an expansion of its Asian wealth business.
The lender said it will pay its first interim dividend of $0.1 a share, following a $0.87 dividend payout last year.
(Reporting by Selena Li in Hong Kong and Lawrence White in London; Editing by Sonali Paul)
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