HSBC share price falls: Doubled profits miss expectations as Gulliver goes on his travels
HSBC more than doubled full-year profits but missed analyst expectations in an early hours announcement today.
Shares in the lending giant fell nearly five per cent in the first hour of UK trading.
Profit before tax was $17.2bn compared with $7.1bn in 2016. Analysts had projected a bottom line of $19.7bn.
“These good results demonstrate the strength and potential of HSBC,” said Stuart Gulliver in his last day as HSBC’s CEO.
“All our global businesses grew adjusted profits and we concluded the transformation programme that we started in 2015. HSBC is simpler, stronger, and more secure than it was in 2011.”
Hugh Young, head of the Asia business at Aberdeen Standard, said HSBC’s figures were much better than previous years.
“[They are] not quite as good as expected in terms of pure numbers, but I think the message is clear – the bank is well on its way to recovery,” he told BBC’s Today programme.
“Every financial institution is under incredible scrutiny today, especially visible institutions like HSBC, and HSBC did make some near-fatal mistakes – in Mexico, with home savings -that would have killed any minor institution.”
Read more: Ain’t no mountain high enough: Top City banker is a man on a mission
Trump
The lender also took a $1.3bn charge relating to US President Donald Trump’s controversial tax reforms. This is slightly more than rivals such as Barclays, which has projected a $1bn hit. But Credit Suisse and UBS have already posted multi-billion dollar write-downs.
HSBC, Britain’s biggest bank, is pivoting towards Asia. Today it said 75 per cent of its profits were now made in the region.
Gulliver’s replacement John Flint said the 2017 results were 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.”
The 2016 figures were weighed down with a $3.2bn impairment charge relating to HSBC’s European private banking arm and sale of its Brazilian operations.
Read more: HSBC appoints John Flint to succeed Stuart Gulliver as chief executive