Company - - Feb 21,2017
The annual profits for the UK-based bank experienced a sharper drop leading to a significant fall in shares.
HSBC shares drop as much as 4 percent on Tuesday due to one-off costs and multibillion-dollar writedowns. These conditions dragged the bank’s 2016 annual profits by 62 per cent dropping it at $7.1bn (£5.7bn).
The UK-based bank accused slowing economic growth in its prime markets comprising of Hong Kong and the UK for the dip in profit figures. Moreover, HSBC also mentioned the $3.2bn loss to its private banking unit in Europe, along with the influence of the sale of its operations in Brazil.
Referring to the US election as well the UK's decision to exit the European Union, the bank stated that 2016 would surely be remembered for a longer time for its major and essentially “unexpected economic and political events".
According to analysts, the bank’s revenue and capital generation have been quite weaker as compared to expectations. Moreover, analysts at Citigroup pointed out that, the weakness in revenues was evident “across all major line items”.
For its plans for 2017, the bank said the result of the US election has raised concerns regarding an escalation in “protectionism".
Last year, HSBC confirmed it would maintain its European headquarters in London, in spite of the Brexit vote.
After announcing the results on Tuesday, Chairman Douglas Flint said the bank's existing plans suggested that it is required to transfer some 1,000 roles from London to Paris in a time span of two years.
He further added the bank had "broadly all the licenses and infrastructure” required to continue to support its clients once the UK cuts its connection with the EU.