HONG KONG: HSBC Holdings raised its key performance target on Tuesday as its first-half profit surged more than two-fold, supported by rising interest rates around the world and the planned sale of its French unit.

The bank also announced fresh buybacks of up to $2 billion, which starts immediately.

HSBC raised its near-term return on tangible equity goal, a key performance target, to at least mid-teens for 2023 and 2024, from a previous target of at least 12% from 2023 onwards. It reported return on tangible equity of 9.9% for 2022.

Europe’s largest bank with a market value of $162 billion posted a pretax profit of $21.7 billion for the first six months this year, versus $9.2 billion a year earlier.

The results were better than the $20.9 billion mean average estimate of brokers compiled by HSBC.

The London-headquartered bank said it would pay an interim dividend of 10 cents per share.

Despite the surge in profit, HSBC warned of pain to come for many customers given an uncertain economic outlook, particularly in Britain where a combination of the highest inflation rate among the G7 group of countries and steadily rising interest rates are squeezing households.

“With more mortgage customers due to roll off fixed-term deals in the next six months, and further rate rises expected, tougher times are ahead,” CEO Noel Quinn said in the bank’s earnings statement.

The bank said its higher credit loss of $1.3 billion in the first six months, versus $1.1 billion a year earlier, resulted partly from exposure to China commercial real estate sector and UK commercial banking.

HSBC, which gets around two-thirds of its revenue from Asia, is putting its global footprint under fresh scrutiny and considering exits from a dozen of countries to boost profits, Reuters reported in May.

The bank on Tuesday said it had reclassified its business in Oman as for sale, after it last year merged its unit there with rival Sohar International Bank.

The lender has also sold its Canadian, French retail and Greek businesses, announced an exit from Russia, and wound down personal banking in New Zealand.

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