Profits are up at HSBC so the bank is buying $2 billion of its own shares

Thomson Reuters

HONG KONG/LONDON (Reuters) - HSBC Holdings on Monday said profit rose 5% in the first half of the year, as Europe's biggest bank reduced operational costs and increased income in its core markets of Britain and Hong Kong.

Pre-tax profit reached $10.2 billion in the six months through June, from $9.7 billion in the same period a year earlier, HSBC said in a statement.

The result compared with the $9.5 billion average estimate of analysts polled by the bank.

HSBC also announced an up to $2 billion share buyback, its third in the past year as it uses excess capital to offset the dilutive effect of shares paid out as dividends. It completed a previously announced $1 billion buyback in April.

(Reporting by Sumeet Chatterjee and Lawrence White; Editing by Christopher Cushing)