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HSBC H1 Profit Up, Plans Upto $1 Bln Buyback; Warns On RoTE View; CEO Steps Down

Asia-focused lender HSBC Holdings Plc (HSBC,HSBA.L) reported Monday that its first-half profit attributable to the ordinary shareholders of the parent company grew to $8.51 billion from last year's $7.17 billion. Earnings per share were $0.42, up from $0.36 a year ago.

Profit before tax went up 15.8 percent to $12.41 billion from prior year's $10.71 billion. The latest results included $828 million dilution gain recognised on the completion of the merger of associate The Saudi British Bank with Alawwal bank in Saudi Arabia. It also included a provision of $615 million related to the mis-selling of payment protection insurance, and $248 million of severance costs arising from cost efficiency measures across its global businesses and functions.

Adjusted profit before tax was $12.2 billion, compared to $11.72 billion last year.

Revenue grew 7.6 percent to $29.37 billion from prior year's $27.29 billion. Adjusted revenue went up 8 percent to $28.50 billion.

Further, the company said it intends to initiate a share buy-back of up to $1 billion, which is expected to commence shortly.

Regarding 2020 financial targets, the company now said that based on the prevailing outlook for interest rates and revenue headwinds in certain segments, it does not expect to achieve 6 percent RoTE target in the US by 2020.

Separately, HSBC said John Flint has stepped down as Group Chief Executive and as a Director by mutual agreement with the Board.

The company appointed Noel Quinn, currently Chief Executive, Global Commercial Banking, as interim Group Chief Executive and as a Director of HSBC Holdings.

The Board has initiated a process to find a new Group Chief Executive. The Board will be considering internal and external candidates.

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