HSBC earnings soar 142 per cent in 2017

HSBC earnings soar 142 per cent in 2017

HSBC earnings soar 142 per cent in 2017

Gulliver, who will hand over to John Flint on Wednesday, added: "It has been my great privilege to lead HSBC for the last seven years, and in handing over to John I am confident the organisation is in great hands".

The bank's shares were down in afternoon trading, falling 2.09 percent in afternoon trading at HK$81.8 ($10.5). The profit figure fell short of the $19.59 billion analysts estimated in a Reuters poll, and appeared to weigh on its stock.

Its strategy of expanding business in the Pearl River Delta, an area of southern China including major cities such as Hong Kong and Guangzhou, has boosted performance, with Asia business driving more than 75 percent of reported and adjusted profit in 2017, the bank said.

Analysts cited the lack of a reliable growth engine due to inconsistent markets and the threat of USA interest rate hikes as problematic for the bank, with a lack of clarity on share buybacks weighing on the stock price.

Greenwood said: "The dividend was maintained but there is no indication as to when growth may resume. All mildly disappointing, which is not good given the lofty rating it is trading on". Company veteran John Flint takes over as the new CEO today. In addition to shifting its focus to Asia, the bank also scaled back some of its operations, including selling its Brazilian business. 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.

"We have been waiting for so long for the comeback of HSBC and I do really think that they are in better shape than other global banks", said Dickie Wong of Kingston Securities Limited, citing dividend yields and cost efficiency as among its strengths.

Gulliver described HSBC as "simpler, stronger, and more secure" than it had been when he became chief executive.

The lender said it was planning additional tier 1 capital issuance of between US$5 billion and US$7 billion during the first half, and that it would undertake share buybacks "as and when appropriate".

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.

"These results and the achievements of the past couple of years give us a great platform to build on", Mr Flint said, commenting on Tuesday's results. The firm's loan impairment charges were about $188 million higher in the fourth quarter than a year earlier, "largely driven by two individual corporate exposures in Europe", it said in a filing.

The last numbers are a blow to Gulliver after he managed to arrest a six-year slide in income over the course of last year and position the bank to return more cash to investors. On top of his £3.9m salary and allowance and £2.1m bonus he will receive £4m of shares.

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