HSBC FY17 Pre-tax Profit Surges; Maintains Dividend

21 February, 2018, 08:06 | Author: Barbara Daniel
  • HSBC’s departing CEO Stuart Gulliver at the Paris Europlace international financial forum

"We're 2,500 people at the end of a year ago, we would continue to invest and add headcount. the opportunity for this organisation is very compelling", Flint, who has been with the bank since 1989, told Reuters.

Adjusted revenue for 2017 was $51.5 billion, up 5 percent from the previous year.

However, Richard Hunter, head of markets at Interactive Investor, took a more sanguine view of the bank's numbers.

The lender said pre-tax profits rose to 17.2 billion United States dollars (£12.3 billion) in the year to December 31, marking a whopping 141% jump compared to 7.1 billion dollars (£5.1 billion) a year earlier.

HSBC has posted a pre-tax profit of $17.2bn (£12.3bn) in 2017, saying its focus on Asia was driving growth.

HSBC shares fell as much as 4.4 percent in London by 0905 GMT, as investors registered the profit performance and disappointment over the absence of a share buyback.

This was reflected in HSBC's shares which were down 3.45% on Tuesday morning. The group is signalling further share buybacks will be considered when appropriate but nothing concrete in this announcement.

The results are the final set for chief executive Stuart Gulliver as he is set to step down this year after 37 years' service, including seven at the bank's helm.

The company, being Europe's biggest bank, claims that its success follows its strategic decision to focus on its Asia operations. He has dealt with the after-effects of rapid expansion that caused the bank to lose its grip on activities in Mexico, where it was used to launder money by drug gangs, and Switzerland, where it admitted aiding aggressive tax avoidance.

Commenting on the financial results, Mr Gulliver said: "These good results demonstrate the strength and potential of HSBC".

HSBC disclosed that various tax probes into its Swiss private bank could cost the company more than $1.5 billion.

Despite the huge improvement from last 2016's earnings - the year which saw HSBC sell its Brazil branch - last year's profit still did not match the £13.52bn ($18.9bn) recorded in 2015. After shrinking and imposing central control over the lender's far-flung global network, while enduring several misconduct issues, investors are now looking for a return to growth.

Flint said: "These results and the achievements of the last couple of years give us a great platform to build on".

"The fundamentals of HSBC will remain the same as they always have - strong funding and liquidity, strong capital and a conservative approach to credit", he said.

At the markets business, revenue in the fourth quarter fell 19 percent, driven by a 48 percent plunge in rates and a 24 percent drop in fixed income and currency trading.

The London-based banking firm, HSBC, has announced its profit of past year, earning £12.3bn (US$17.2bn). On top of his £3.9m salary and allowance and £2.1m bonus he will receive £4m of shares.

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