HSBC records a pre-tax profit of £16.8bn for the first half of 2024

The company called the result “stable” after it reported a mammoth $21.7bn in pre-tax profit in the first half of last year.

Operating expenses of £12.6bn were 5 per cent higher than in the first half of 2023, driven primarily by higher technology spend and investment, inflationary pressures, and an increase in the performance-related pay accrual.

In a statement, group chief executive Noel Quinn said: “After delivering record profits in 2023, we had another strong profit performance in the first half of 2024, which is further evidence that our strategy is working.

“Our investment in wealth is delivering higher, more diversified revenue and we continue to grow our core international and scale businesses, all of which helped us to provide $13.7bn (£10.6bn) of distributions in respect of the first half.

“We are confident that we have the right strategy and model to grow revenue, even in a lower interest rate environment, and are therefore providing new guidance of a mid-teens return on average tangible equity in 2025.”

He added: “I have always been immensely proud of the heritage of this bank and the strategic role it plays in the world. My aim when I took this job was to deliver financial performance to match our standing. Working together, I believe we have done that and created a strong platform for growth.”

Richard Hunter, Head of Markets at interactive investor, commented: “The HSBC model is slightly different from that of its UK banking peers, leading not only to a strong set of numbers but also putting strong building blocks in place in order to continue its global significance.

“The bank is moving towards a business which has less of a slavish reliance on interest rate movements and levels, with increasing focus on the growth in affluent wealth, especially in Asia.

"The group has been investing heavily in this move, giving HSBC higher, but more diversified income streams.

"Apart from the longer-term potential for the key Chinese market, the group previously identified areas such as India and Vietnam as being some of the fastest growing economies at present, while the building economic connections between Asia and the Middle East, notwithstanding any geopolitical conflicts, are also emerging opportunities for HSBC with its sprawling footprint.”

The subject of shareholder returns also remains sharply in future strategic focus, Mr Hunter added.

He continued: “HSBC has announced a further £3bn share buyback programme, in addition to one of the same size which has recently been completed.

"The ordinary dividend yield of 7 per cent is the highest in the sector by some margin and, with the special dividend previously announced as a result of the sale of the Canadian business, this figure jumps to 9.4 per cent. The scale of returns looks likely to continue as the business continues on its gargantuan revenue path.”