HBOS posted a 15 percent jump in first-half profit today and increased its planned share buyback for this year by one-third to €1.44 billion.
Pretax profit for the six months ended June 30 rose to €3.27 billion from €2.85 billion a year earlier as revenue growth outstripped cost increases, Britain's fourth-biggest bank by market value said in a statement.
Analysts' average profit forecast was €3.25 billion in poll of 10 analysts, though estimates were complicated by a change to new IFRS accounting rules. Excluding a €188 million charge for compensating misadvised mortgage customers, profit beat forecasts.
Corporate banking and insurance and investments made up for slowing growth in profit from retail banking, which has been the main driver of HBOS's growth since it was formed from the merger of Halifax and Bank of Scotland in 2001.
The bank said it would buy back up to €1.44 billion of shares, having previously planned to buy €1.085 billion of its own stock. Chief Executive James Crosby said the bank could go for a similar buyback next year.
"If the analysis that we did at the end of last year that led to this year's buyback programme is the same at the end of this year, and I'm not saying it will be, I wouldn't be surprised if we came to the same conclusion," Crosby told journalists.
HBOS's bad-debt charge rose 25 percent to €1.089 million, more than analysts' expectations of a rise of about 18 percent, but Crosby said interest rates had probably peaked and high employment would support credit quality.