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High street bank HSBC unveiled a $2 billion share buyback after reporting a rise in third-quarter profit driven by additional credit provision releases.
For the third quarter, pre-tax profit increased by $1.0 billon to $1.5 billion year-on-year while revenue rose 1% to $12 billion.
Expected credit loses were a net release of $0.7 billion, compared with a $0.8b billion ECL charge in 3Q20, reflecting 'continued stability in economic conditions and better than expected levels of credit performance,' the company said.
Net interest margin of 1.19% was broadly stable compared with 3Q20 and 2Q21.
Quarterly common equity tier 1, or CET1, capital ratio rose 30 basis points to 15.9%, reflecting a 'reduction in risk-weighted assets, partly offset by a decrease in CET1 capital, net of foreseeable dividends,' it added.
'Given current consensus economics and default experience, we expect a net release of ECL for 2021, with the potential for a further small net release of ECL in 4Q21, dependent on offsetting levels of stage 3 charges,' the company said.
'Given inflationary pressures, continued investment and the impact and timing of recently announced acquisitions and disposals, we now expect adjusted costs of approximately $32bn for 2021 and 2022.'