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HSBC eyes resuming buybacks in second half of 2023
Published by Jessica Weisman-Pitts
Posted on September 12, 2022
2 min readLast updated: February 4, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on September 12, 2022
2 min readLast updated: February 4, 2026
By Lawrence White
LONDON (Reuters) -HSBC is likely to resume share buybacks in the second half of next year, its Chief Financial Officer Ewen Stevenson said on Monday, as the bank looks to boost payouts to investors having curbed them at regulators’ behest during the COVID-19 pandemic.
The bank earlier this year said buybacks would be unlikely in 2022, but said it would resume return of excess capital over what was required to execute its strategy in future years.
“Fundamentally, our approach on distributions is to view dividends as the primary basis of returning capital to shareholders, and that we use buybacks to soak up surplus capital,” Stevenson told investors at an event run by rival bank Barclays.
Like rivals, HSBC has in recent years shifted to a mix of buying back its own shares and paying dividends, rather than just the latter, as a means of returning extra cash to investors.
Buybacks can signal a company thinks its own shares are underpriced, or that it cannot see greater benefits from investing the capital in its business.
HSBC has more work to do to cut costs, Stevenson said, adding the bank is under pressure due to high inflation levels worldwide.
“All of our suppliers are trying to squeeze through material price increases on us, so the only way to take that out is to be pretty brutal internally on costs,” he said.
Stevenson said the bank was still in dialogue with its biggest shareholder Ping An – which has pushed for changes to improve the bank’s returns – but said the lender disagreed with any suggestion it should be broken up.
“Where we have agreement is the bank has been underperforming,” he said, adding he believed HSBC’s strategy would start to address this from next year. “The structural alternatives, I think we have a clear difference of view,” he added.
(Reporting By Lawrence White, editing by Iain Withers)
A share buyback occurs when a company purchases its own shares from the marketplace, reducing the number of outstanding shares. This can signal that the company believes its shares are undervalued.
Dividends are payments made by a corporation to its shareholders, usually derived from profits. They can be issued in cash or additional shares and are a way to distribute earnings to investors.
Excess capital refers to funds that a company has available beyond what is necessary for its operations and growth. Companies may return this capital to shareholders through dividends or buybacks.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy stable.
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