Thursday 23 November 2017

HSBC profits rise less than expected

HSBC: profits up by less than expected. Photo: Bloomberg News
HSBC: profits up by less than expected. Photo: Bloomberg News

Jon Menon and Andrew MacAskill

HSBC, Europe’s biggest bank, said full-year net income rose 1.9pc as bad-debt impairments rose and profit in Asia fell.

Earnings increased to $5.83bn from $5.73bn a year earlier, the lender said today in a statement.

Loan impairment charges and other credit risk provisions rose to $26.5bn in 2009 compared with $24.9bn the previous year, the company said.

Pretax profit in Hong Kong declined to $5.03bn from $5.46bn, and fell 11pc in the rest of Asia-Pacific to $4.2bn.

“Huge challenges and risks remain for all of us,” said Chairman Stephen Green in the statement.

The bank plans to trade its shares in Shanghai and moved Chief Executive Officer Michael Geoghegan to Hong Kong from London last month to sharpen its focus on Asia.

HSBC halted consumer finance loans in the US after racking up provisions of at least $70bn in the past four years following its acquisition of US subprime lender Household International Inc.

“There were a lot of people who were pushing the stock up as a top stock for this year,” said Simon Maughan, an analyst at MF Global Securities Ltd, who has a “neutral” recommendation on the bank. “The environment isn’t there to develop these earnings.”

Bonus to charity

HSBC fell 2.93pc to 698.5 pence as of 8:47am in London, the biggest decline in the FTSE 350 Index of five UK banks.

Geoghegan plans to give as much as £4m of his bonus to children’s charities, according to a separate emailed statement.

Pretax profit at the investment banking unit more than tripled to $10.5bn from $3bn. It was the only one of HSBC’s divisions to report a gain in profit.

The bank’s North American unit posted a loss of $7.74bn from a loss of $15.53bn, the bank said.


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