HSBC is launching a jointly-owned business focusing on the development of embedded finance and financial services apps with B2B FinTech Tradeshift.

The bank said it plans to make a $35 million investment towards Tradeshift and will join the company's board. The deal is part of a funding round expected to raise a minimum of $70 million from HSBC and other investors.

The announcement comes after HSBC's profits more than doubled from $8.7 billion to $21.6 billion during the six months to 30 June compared to the same period of 2022.

The companies say the new business, expected to launch in early 2024, will enable them to roll out a range of digital solutions across Tradeshift and other platforms, including payment and FinTech services embedded into trade, e-commerce, and marketplaces.

“Enabling and growing global trade has been in HSBC’s DNA for almost 160 years,” said Barry O’Byrne, chief executive of global commercial banking at HSBC. “We are very excited to partner with Tradeshift to help businesses and their suppliers trade more smoothly using world-class technology and solutions that the joint venture will deliver.”

The chief exec added that the agreement supports its strategy to become a “digital first bank", which includes partnering with FinTechs and embedding financial services solutions into the platforms of other companies.

HSBC said that strong profits for the first half of the year were in part driven by a $2.1 billion reversal of an impairment relating to the planned sale of its retail banking operations in France and a provisional gain of $1.5 billion on the acquisition of Silicon Valley Bank UK Limited.

“We have delivered a strong first half performance and are confident of achieving our revised mid-teens return on tangible equity target in 2023 and 2024," said Noel Quinn, group chief executive, commenting on the bank's latest financial results. "There was good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest income, and continued tight cost control."

He warned that while there is "still much work to do" given the challenges happening in the global economy, the bank is giving shareholders a second interim dividend of $0.10 per share and a share buy-back in 2023 of up to $2 billion.

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