Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. Hong Kong
  4. Hong Kong Stock Exchange
  5. AIA Group Limited
  6. News
  7. Summary
    1299   HK0000069689

AIA GROUP LIMITED

(1299)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Buyback and profit rise show progress as HSBC looks east

07/31/2017 | 09:05am EDT
People walk past a major branch of HSBC at the financial Central district in Hong Kong

HONG KONG/LONDON (Reuters) - A third share buyback in a year by HSBC underlined progress in the turnaround plan for Europe's biggest bank, with profit also growing by 5 percent in the first half of 2017.

The news sent HSBC shares up three percent to a four-year high of 764 pence each in London, as the bank signaled further buybacks and confidence it can continue to improve revenues from growth in Asia.

Chief Executive Officer Stuart Gulliver and Chairman Douglas Flint are both retiring, leaving a legacy of improving revenue and returning more capital to shareholders, having focused on trimming the bank's empire and shifting its focus eastwards.

The latest share buyback, of up to $2 billion, comes as HSBC uses excess capital to offset the dilutive effect of shares paid out as dividends. It completed a previously announced $1 billion buyback in April.

The buybacks and sustained dividends show HSBC further ahead in its turnaround compared with British-based rivals including Barclays and Standard Chartered which have suspended payouts as they restructure.

"The return of capital comes from the fact that the business is very accretive, very profitable ... the dividend is 51 cents for the foreseeable future," HSBC Finance Director Iain Mackay told Reuters on Monday.

HSBC said its common equity tier 1 ratio -- a measure of financial strength -- was 14.7 percent at the end of June, the highest among major European banks.

The ratio is set to increase further as the bank repatriates about $8 billion stuck at its U.S. subsidiary, following approval last year from the U.S. Federal Reserve, potentially enabling further buybacks.

"I cannot tell you whether we'll do a further buyback this year, but we are using buybacks as a regular part of the toolkit to manage returns to shareholders," Gulliver told reporters on a conference call.

The latest buyback will take the total of HSBC share buybacks since the second half of 2016 to $5.5 billion.

HSBC's dividends totaled $10.1 billion in 2016, $10 billion in 2015 and $9.6 billion in 2014.

For the half-year through June, pretax profit rose to $10.2 billion from $9.7 billion in the same period a year earlier, a result that compared with the $9.5 billion average estimate drawn from analysts polled by the bank.

CHINA VENTURE

Gulliver, who is set to retire from HSBC next year, said he could be at HSBC as late as December 2018 if an external candidate is appointed by incoming Chairman Mark Tucker.

Former AIA Group Chief Executive Tucker, HSBC's first ever externally appointed chairman, is set to take up the role on Oct. 1.

Gulliver and Flint have bet on Asia, where the bank makes three quarters of its profits, to drive further returns.

The bank announced two years ago it would hire 4000 staff and lend more in China's southern Pearl River Delta region, a plan that has since encountered some setbacks as China's growth slowed, showing both the risks and opportunities.

"The key driver of the bank's performance will be the east, not the west, positioning the bank well to capitalize on the growth of developing Asian economies, though that of course comes with a risk warning attached," said Laith Khalaf, senior analyst at Hargreaves Lansdown.

HSBC on Monday said pre-tax profit in Asia rose 7 percent in the first half to $7.6 billion, mainly helped by stronger wealth management and insurance revenue in Hong Kong.

HSBC won approval last month in China to establish an investment banking joint venture with a state-backed fund, ending a 20-month wait, making it the first such venture in China to be majority-owned by a foreign bank.

The venture will allow HSBC to expand in the world's second-largest economy, and is central to its ambition to increase profits by allowing the bank to underwrite and trade corporate bonds in China's domestic market.

The venture will be opened in December and staffed at first by around 50 people, Gulliver told Reuters on Monday.

(Reporting by Sumeet Chatterjee and Lawrence White; Editing by Christopher Cushing and Stephen Coates)

By Sumeet Chatterjee and Lawrence White

Stocks treated in this article : Standard Chartered, AIA Group Ltd, Barclays, HSBC Holdings

ę Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
AIA GROUP LIMITED 5.97% 88.75 End-of-day quote.-6.58%
ALPHABET INC. 0.23% 2780.66 Delayed Quote.58.30%
BARCLAYS PLC 0.06% 175.02 Delayed Quote.19.25%
HSBC HOLDINGS PLC -0.54% 359.75 Delayed Quote.-4.53%
IP GROUP PLC -1.01% 137.6 Delayed Quote.40.55%
LETS HOLDINGS GROUP CO., LTD. -2.84% 6.5 End-of-day quote.-16.45%
LOOK HOLDINGS INCORPORATED -2.60% 1388 End-of-day quote.45.04%
STANDARD CHARTERED PLC -0.24% 410 Delayed Quote.-11.78%
All news about AIA GROUP LIMITED
09/16AIA Group Limited Appoints Sun Jie as Member of Nomination Committee
CI
09/15Hong Kong shares drop over 1.5% as tech, casino stocks weigh
RE
09/15China stocks mixed as weak growth data weighs; Hong Kong down
RE
09/14AIA Group Limited Declares an Interim Dividend for the Six Months Ended 30 June 202, Pa..
CI
09/10AIA : Files for Hong Kong Bourse Listing of $887 Million of Euro-Denominated Callable Secu..
MT
09/06Hong Kong shares rise, led by tech and financials
RE
09/02AIA GROUP LIMITED : Ex-dividend day for interim dividend
FA
09/01BANK OF EAST ASIA : Completes $657 Million Sale of Insurance Arm to AIA; Shares Jump 3%
MT
08/30AIA : Malaysia's CIMB fintech business has raised $75 million this year
RE
08/27Hong Kong shares end flat as insuers' gains offset loss in tech stocks
RE
More news
Analyst Recommendations on AIA GROUP LIMITED
More recommendations
Financials (USD)
Sales 2021 35 792 M - -
Net income 2021 6 816 M - -
Net Debt 2021 - - -
P/E ratio 2021 156x
Yield 2021 0,22%
Capitalization 1 071 B 138 B -
Capi. / Sales 2021 29,9x
Capi. / Sales 2022 27,4x
Nbr of Employees 23 000
Free-Float 100,0%
Chart AIA GROUP LIMITED
Duration : Period :
AIA Group Limited Technical Analysis Chart | 1299 | HK0000069689 | MarketScreener
Technical analysis trends AIA GROUP LIMITED
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 28
Last Close Price 88,75 $
Average target price 14,83 $
Spread / Average Target -83,3%
EPS Revisions
Managers and Directors
Yuan Xiang Li President, Group CEO & Executive Director
Garth Jones Group Chief Financial Officer
Sze-Wing Tse Independent Non-Executive Chairman
Biswa Misra Group Chief Technology & Operations Officer
Mark Konyn Group Chief Investment Officer