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HSBC rides out China property storm with 74% profit jump

25/10/2021 15:26

HSBC (HSBA.L) shrugged off concerns about pandemic-related bad loans and property problems in China on Monday with a surprise 74% quarterly profit jump and a $2 billion share buyback.

The British bank's profit growth was mainly driven by the release of cash reserves set aside in anticipation of pandemic-induced defaults, with HSBC's finance chief Ewen Stevenson telling Reuters that the worst of that impact is likely past.

"You should also look at the buyback as a measure of the confidence that we have at the moment that we are not unduly concerned about our exposures in China," Stevenson said.

The Asia-focused bank said it had $19.6 billion in lending to China's property sector, where China Evergrande Group (3333.HK) is grappling with a $300 billion debt pile, stoking fears of further defaults and contagion risks.