(News Bulletin 247) – HSBC on Monday unveiled better-than-expected earnings for the first quarter, a performance that was greeted by an increase of more than 4% in the stock on the London Stock Exchange.

Its pre-tax profit for the first three months of the year increased to 12.9 billion dollars, against 4.1 billion a year earlier, thanks in particular to a reversal of a provision on the proposed sale of its retail activities in France.

The banking giant – which concluded the takeover of the British activities of Silicon Valley Bank (SVB UK) last month for a symbolic pound – also points out that it has made an immediate capital gain of around 1.5 billion dollars on the transaction based on the current valuation of the assets taken over.

“The strength of our first quarter performance provides further proof that our strategy is working well,” said Chief Executive Noel Quinn.

Operating expenses fell 7% to $7.6 billion as a result of the cost reduction program that was finalized late last year.

The first European bank by assets – which had interrupted the payment of dividends with the Covid crisis – plans to pay its shareholders a coupon of 0.10 dollars and to launch a share buyback program likely to reach two billion of dollars.

The group promises an increase in the redistribution of capital to its shareholders, both in the form of dividends and share buybacks.

In its statement, HSBC also said it was confident of achieving a return on tangible equity (ROTE) of at least 12% this year and beyond.

Following these announcements, HSBC shares climbed 4% on Tuesday morning, signing the second best performance of the FTSE index on the London Stock Exchange, which advanced 0.3% at the same time.

The title was also the main driver of the European index of the banking sector, the STOXX Europe 600 Banks, which posted an increase of 1.3% this morning.

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