Select a page

Banking News

HSBC net profits tank

HSBC net profits tank

(23 February 2017 – United Kingdom) HSBC has reported an 82 percent drop in annual net profits, blaming one-off items including multibillion-dollar writedowns in Switzerland and Brazil.

The bank said that falling global trade and slowing growth in its main markets of Hong Kong and the UK also contributed as pre-tax profits fell to their lowest level in seven years, while net profits plunged from $13.5 billion to $2.5 billion (A$3.24 billion).

The bank’s chief executive, Stuart Gulliver said that redeployment of some assets to faster-growth markets in its "pivot to Asia" strategy had been "somewhat softer" because economic growth had slowed in several markets.

The bank might redeploy only US$80 to 90 billion of the assets it has cut instead of up to US$150 billion as it originally planned, he added.

Gulliver said that HSBC was looking for acquisition opportunities in asset management, having spent 10 years focused on disposals, during which time it has shed 96 businesses .

The bank’s pre-tax profits fell 62 percent to US$7.1 billion. It took a US$3.2 billion writedown for all goodwill on its Switzerland-based private bank. Net profits attributable to shareholders fell to US$2.5 billion, as the bank also took a US$1.1 billion charge for selling its Brazilian unit. The bank said it would buy back US$1 billion of shares, adding to US$2.5 billion of repurchases last year.

Gulliver said the bank had reservations about increased barriers to trade, following the Trump election, and over political risk, with far-right candidates leading the polls in France and the Netherlands.

"It is obviously a concern - it would be naive not to say so," he said.

East & Partners's avatar

Comment on this article

 

Your comments will not be published. Required fields are marked *

 

Please enter the word you see in the image below:


Subscribe

Subscribe to our mailing list

Sign up now to keep up-to-date with the latest
market news and insights in B2B banking.

* indicates required

For more information please read our Terms and Conditions and Privacy Statements.