HSBC unveiled a $1bn share buyback and raised its net interest income outlook after first-half profit jumped 23% to $19.5bn, ahead of market forecasts.

The bank delivered a robust first half, with profit before tax rising 23% to $19.5bn, beating analyst expectations of around $18.9bn.

Revenue increased 11% to $37.7bn, driven by higher net interest income, strong wealth management and transaction banking fees, and favourable currency movements. Profit after tax also rose 23% to $15.3bn.

Banking net interest income climbed to $22.9bn as deposit growth and higher returns from the bank's structural hedge more than offset lower interest rates, lifting net interest margin by four basis points to 1.61%.

HSBC also resumed capital returns, declaring a second interim dividend of $0.10 per share and launching a $1bn share buyback, ending a three-quarter pause that followed the bank's privatisation of Hang Seng Bank.

The buyback is expected to be completed before the group reports its third-quarter results.

The bank reaffirmed its target of delivering a return on average tangible equity of at least 17% between 2026 and 2028 and maintained its 50% dividend payout ratio goal.

Second-quarter performance was particularly strong, with profit before tax surging 60% to $10.1bn and revenue rising to $19.1bn, supported by growth in wealth management, debt and equity markets, wholesale transaction banking and net interest income.

Expected credit losses increased to $2.4bn, reflecting a $400m UK fraud-related securitisation exposure, further provisions tied to Hong Kong commercial real estate and allowances linked to conflict in the Middle East. Operating expenses rose 2% to $17.4bn as continued investment in technology was partly offset by savings from the bank's restructuring programme.

Balance sheet growth remained healthy, with customer lending increasing by $34bn and customer deposits rising by $41bn, supported by strong momentum in Hong Kong and corporate banking.

Georges Elhedery, Group CEO, said: "HSBC is becoming the stronger bank we set out to build. We are executing our strategic priorities with pace, precision and discipline. This is allowing our four businesses to focus on their core strengths, grow, work together more effectively and deepen customer relationships. The result is a bank capable of achieving more."

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