HSBC boosts investments in growth push, unveils $2 billion share buyback

HSBC sees 4% drop in Jan-Mar pre-tax profit, declares $2-bn share buyback

"Given the growth opportunities we now see, we expect this to be the only share buyback that we announce in 2018", Europe's biggest bank by assets said, adding the process was expected to start shortly.

HSBC also took a surprise US$897 million in provisions against expected settlements for past misconduct cases, which it said included a US Department of Justice investigation into its sale of toxic mortgage-backed securities.

HSBC's new bosses got a frosty reception to their first market update as investors showed no signs of being won over by plans for $2bn (£1.5bn) worth of share buybacks.

The banking behemoth generated revenue of $13.7bn in the first three months of the year, up 6% compared to a year ago, or 3% at the underlying level if excluding currency translation and movements in significant items.

Flint said on Friday the bank would not look to acquire a domestic business in the U.S.to increase its scale there, contrary to what had been mooted in media reports earlier this year.

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Europe's biggest bank by assets, which earns most of its profits in Asia, has long struggled to hit its cost control targets.

The rising costs and subdued return on equity reported Friday underline the challenges.

In the first quarter, adjusted pre-tax profit hit $6.03bn, or 3 per cent lower than the same period previous year, but slightly above analyst expectations of $6bn. The lender said at the time a buyback wasn't possible for technical reasons, and held the door open for a share repurchase in the second quarter.

The bank reported an annualised return on tangible equity of 8.4 percent, down from 9.1 percent in the comparable period of 2017. Net interest margin, banks' key difference between interest paid on deposits and that charged for loans, improved to 1.67 from 1.63 at the end of December and 1.64 a year ago.

"We continue to benefit from interest rate rises and economic growth, particularly in Asia", John Flint, the bank's chief executive, said.

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