HSBC profits slide as bank remains quiet on advice plans
- Author: Zachary Reyes Feb 21, 2017,
Feb 21, 2017, 20:40
The bank blamed slowing growth in its core markets of Hong Kong and the United Kingdom, while its adjusted profit fell $1.2bn short of analyst estimates.
HSBC's reported numbers didn't impress, with statutory pre-tax profit falling 62% to $7.1bn, as one-off costs and multibillion-dollar writedowns took their toll.
HSBC's adjusted pretax profit for the fourth quarter of 2016, which excludes one-time items, stood at $2.62 billion, a 39-per cent jump from the previous year's quarter, the bank said in a statement today.
Gulliver, 57, saw his annual incentive pay for 2016 raised to 1.7 million pounds from 1.1 million pounds a year earlier as he hit targets for paring expenses and assets, even as he fell short of a profit goal, the bank said in its annual report Tuesday.
HSBC bought its European private-bank businesses in 1999, paying $9.85 billion to acquire Edmond J. Safra's Republic New York Corp. and Safra Republic Holdings SA. Lloyds, Barclays, RBS and Standard Chartered will post full-year results in the coming days.
The bank's Hong Kong stock lost 3.4 per cent to HK$66.65 as of 2:19 p.m. local time, the biggest intraday drop since 9 November.
Royal Banking Group is expected to report an eye-watering loss of £6.1bn as it sets aside a further $3.8bn for expected fines from U.S. authorities over the way it packaged up and sold mortgages nearly a decade ago.
The bank also reported a steep global loss that sent its share price tumbling.
The bank also disclosed it was under investigation by Britain's Financial Conduct Authority into its compliance with money laundering regulations.
Mr Khalaf added: "Despite an underwhelming set of full year results, HSBC is making progress in de-risking and restructuring, and ultimately the bank's focus on the far east could be its trump card if the Chinese economy starts to fire on all cylinders".
Gulliver told reporters on a conference call that he could not estimate the impact of the investigation but that it reflected the bank finding more "bad actors" among its clients as it improves controls.
And "just in case the Q4 2016 outturn was not bad enough", Investec continued, the other short-term revenue headwinds identified by HSBC in the report, including harmful translational effects from FX rates and United Kingdom rates, and an "underwhelming" $1bn share buyback announcement are further reason to dump the stock, in its view.
Regarding Brexit, Gulliver asserted that the June referendum decision had yet to feel its impact upon business, however it still remains committed to moving 1,000 of its 43,000 United Kingdom workforce to Paris once Brexit has been completed.
The Chairman Douglas Flint along with Gulliver is the longest-serving duo that is heading a major European bank.