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HSBC said on Monday that reported profit before tax went up by 4.58 percent year-over-year to $10.71 billion in the six months of 2018.
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That's above analyst estimates compiled by Reuters and a rebound from a surprise fall in pre-tax profit in the first quarter.
HSBC HSBA-GB , Europe's largest bank, made a comeback by beating estimates in its financial results for the first half of 2018 — following a surprise fall in profits in the first quarter.
The bank said on Monday that reported profit before tax went up by 4.58 percent year-over-year to $10.71 billion in the first six months of 2018 — beating analyst estimates of $10.38 billion, according to data compiled by Reuters.
The London-headquartered bank said revenue also improved in the first half of the year: Reported revenue rose 4 percent year-over-year to $27.29 billion, also above Reuters' estimates of $27.63 billion.
Operating expenses grew to $17.5 billion in the first half of the year from $16.4 billion in the same period last year. The bank's costs have become a closely watched metric by investors after an increase expenses in the first quarter resulted in a decline in profits.
Shares of HSBC HSBA-GB , a heavyweight on the Hang Seng Index , rose 0.83 percent after the Hong Kong market returned from a lunch break.
HSBC's chief executive, John Flint, said the results are in line with expectations.
"This is creating room to invest while maintaining our commitment to full-year positive adjusted jaws," he said in a statement accompanying the results announcement.
Flint announced in June that the bank plans to spend an additional $15 billion to $17 billion on areas including "growth and technology" between 2018 and 2020. Doing so would grow the bank's cost base by "low-to-mid-single digit percentages each year until the end of 2020," Flint said.
The Asia-focused bank also gave an update on its $2 billion share buyback program announced in May. HSBC said, as of June 30, $1 billion of shares had been bought back and canceled.
Analysts had been optimistic that the bank would make a turnaround in its bottom line. Dickie Wong, executive director of Kingston Securities, said earlier he expects HSBC HSBA-GB to report a 5 percent gain in pre-tax profit for the six months ended June.
"I think they can make a turnaround and rebound quite significantly," Wong told CNBC's Emily Tan on Monday ahead of the bank's results announcement.
"First of all, we see a clear tendency everywhere, not just in Hong Kong, for interest margin to be improving. And also, HIBOR is on a good track, so I think HSBC can make a comeback after the slight drop in the first quarter," he added.