(21 February 2018 – Asia) HSBC Bank posted a lower than expected rise in annual profits, while revealing plans to raise up to US$7 billion in capital.
Outgoing CEO Stuart Gulliver is handing the reigns over to a new leadership team, following more than seven years in the role.
“In my own view my performance has been satisfactory,” Gulliver said.
The bank’s profit before tax was US$17.2 billion for 2017, up from US$7.1 billion in 2016. However, the 2016 profits were impacted by a US$3.2 billion impairment of goodwill in the global private banking business in Europe and its sale of operations in Brazil.
HSBC said it was planning additional tier 1 capital issuance of between US$5-7 billion during the first half of this year, and that it would undertake share buybacks “as and when appropriate.”
John Flint will be taking over from Gulliver. He is tasked with guiding the bank back to growth, with Asia a being a key focus, considering the region accounted for 75 percent of HSBC’s profits in 2017.
“We’re 2,500 people at the end of last year, we would continue to invest and add headcount … the opportunity for this organization is very compelling,” Flint said.
Those growth plans should benefit from a more favourable interest rate environment for the bank’s deposit-heavy franchise than Gulliver enjoyed.
The bank’s investment banking division grew by around three percent.
HSBC reported a US$218 million jump in bad loan charges in the fourth quarter compared with the previous period, which it blamed on ‘two individual corporate exposures in Europe’.