Noel Quinn signed off his final quarter as boss of HSBC Holdings Plc by announcing that the bank will return US$3 billion to shareholders, after the lender reported earnings that beat expectations.

HSBC’s pretax profit for the three months through June rose to US$8.9 billion, according to the statement, topping the US$7.74 billion average of analyst estimates compiled by Bloomberg. Shares of the bank rose in London trading. 

HSBC now expects banking net interest income of about US$43 billion for 2024, up from an earlier forecast of at least US$41 billion. The new forecast comes as the Bank of England has held off on cutting rates in recent months, buoying HSBC’s results.  

The buyback is a function of HSBC’s “confidence for the future,” Quinn said in an interview with Bloomberg Television. He will hand over the reins to the current chief financial officer Georges Elhedery on Sept 2, 2024. 

Quinn - who will remain available to HSBC until his notice period ends in April - said on a call with journalists that for now, he plans to rest and recover. The 62-year-old has previously said that running the bank was an “intense” experience and he is planning to develop a portfolio career after the break.

Shares of HSBC were up as much as 4.25% in London, one of the best performers in the FTSE 100 Index on Wednesday.

The London-based lending giant is preparing for the leadership transition at a critical time, which Quinn has described as an “inflection point”, as it strengthens its Asian roots in a strategic pivot that has deepened over the past few years. It has disposed of major businesses in the West, including its French and Canadian operations, and has redeployed capital to particularly Southeast Asia and China. 

HSBC named Jonathan Bingham, its global financial controller, as interim group chief financial officer with effect from Sept 2, according to a separate filing. The bank is undertaking a search to name a permanent candidate, it said. 

Most recently, HSBC announced a revamp that would simplify its global banking business to make it look more like its bigger rivals like Citigroup Inc. The consolidation of several of its industry coverage units into five larger groups has been seen as the latest sign that the lender is preparing for a world readying for interest rate cuts.

Profit in the second quarter from key divisions such as its wealth and personal banking business fell slightly to US$3.28 billion, but earnings were generally cushioned by lower bad loan provisions.

HSBC reported a record profit last year, driven by surging interest rates, as monetary authorities around the globe resorted to one of the most aggressive tightening cycles to tame inflation. However, expectations are that this boost will begin to unwind soon. 

Efforts are also underway to cut the bank’s expense bill, with moves to slow hiring and rein in travel and entertainment costs, Bloomberg News reported earlier this month.

Elhedery’s task in his new role as CEO would be to consolidate those changes and set the bank on a path to further growth, while navigating tensions between the US and China, as well as a fragile political and economic environment in Hong Kong, the bank’s single biggest market. 

He told analysts on a conference call on Wednesday that the British lender is planning to keep its overall bonus pool flat for the year.

On his appointment earlier this month, Elhedery pledged to deliver “exceptional value” to clients and investors and a “sustainable growth trajectory”.

  - Bloomberg