>> Storm clouds ahead for Europe's biggest bank. HSBC announcing Wednesday, a share buyback of $2.5 billion after their profits plummeted nearly 30% compared to last year. Reuters banking correspondent Lawrence White says, management feel the stock is undervalued, but shareholders have been soothed by the news.>> So investors have taken some comfort from this measure, the shares rose 3.5% in London initially, before falling down slightly afterwards.
The bank also said that they're going to abandon their timetable for achieving a 10% return on equity, suggests realism in the face of slowing global economic growth.>> Revenues have been hit by sluggish growth in key markets Europe and Hong Kong. And there could be more dark clouds on the horizon including fallout from the Brexit vote and China's slowing economy.
>> The impact of Brexit has mainly been small businesses in Britain have reduced their applications for new funding, there's a bit of uncertainty for small business owners as to whether to invest or not. HSBC said it was removing the word progressive from its guidance on dividend, signalling that they don't expect to continue growing a dividend in the face of global economic uncertainty.
>> But the problems don't stop there. Europe's banking sector has been rattled by record low interest rates and rising regulator costs. HSBC CEO Stuart Gulliver says, uncertainty is likely to last for some time.