Major Banks Report Mixed Q2 Earnings

HSBC reported a 29% decline in second-quarter profit before tax to $6.3 billion, missing expectations, due to impairment charges and lost income from disposed businesses. Despite this, the bank announced a $3 billion share buyback. Operating expenses rose 10% due to restructuring costs and technology investments. HSBC's CEO cited "structural challenges" to the global economy, including tariffs and fiscal vulnerabilities, and warned of muted lending demand. However, the bank forecasts growth in its wealth division and is scaling back its investment banking operations outside of Asia and the Middle East.

UBS reported a doubling of its second-quarter net profit to $2.395 billion, beating analyst expectations, driven by growth in its investment banking and global wealth management divisions. The bank's revenues reached $12.112 billion, just below expectations. UBS' global markets unit saw a 25% annual revenue hike, while its global wealth management division reported a 12% increase in transaction-based income. CEO Sergio Ermotti noted that client activity levels reflected a "healthy" environment, but investors remained cautious amid macroeconomic uncertainties. The bank's net interest income outperformed expectations, and it expects "broadly stable" net interest income in the third quarter. UBS also reiterated its financial targets and continued its share buyback program, having completed $1 billion in repurchases in the first half of the year.

HSBC reported a 29% drop in second-quarter pre-tax profit to $6.33 billion due to slimmer lending margins and a $2.1 billion loss related to its diluted stake in Bank of Communications. Despite this, the bank plans to maintain its $3 billion stock buy-back program for the next three months and pay a dividend of 10 US cents per share, the same as in the preceding quarter.