HSBC PRE-TAX PROFIT SURGES TO US $17.2B
‘Simpler, stronger’ lender posts US$9.7b net profit
Banking giant HSBC more than doubled pre-tax profit to US$17.2 billion (RM67 billion) last year, it announced yesterday, after a recovery drive to streamline its business and slash costs.
Adjusted pre-tax profit also rose 11 per cent year-on-year to US$21 billion as revenue growth outweighed operating expenses, said the bank.
The results came as new chief executive John Flint takes over from Stuart Gulliver, who steps down following seven years at the helm.
Flint, who was previously head of retail banking and wealth management at HSBC, has said he wants to accelerate the pace of change at the bank.
The Asia-focused firm has laid off tens of thousands of employees since 2015 as part of a wideranging overhaul that also saw it sell off its Brazil operations.
The bank’s strategy of expanding business in the Pearl River Delta, an area of southern China including major cities such as Hong Kong and Guangzhou, has also boosted performance.
Gulliver said HSBC had concluded the transformation programme that it started in 2015 and described it as “simpler, stronger, and more secure” than it had been when he became chief executive.
But chairman Mark Tucker warned that while the bank was optimistic about the global economy this year, rising international tensions and the threat of protectionism could be disruptive.
Yesterday’s surge in reported pre-tax profit was a 141 per cent rise on the US$7.1 billion it posted in 2016.
Net profit stood at US$9.7 billion last year, up from US$1.3 billion year-on-year.
Analysts described it as a turning point for HSBC, which has been hit by a string of financial scandals in recent years.
“In the past seven years it’s not (been) a good time for not only the HSBC management but also for their investors as well,” said Dickie Wong of Kingston Securities Limited.
“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 international banks,” he said, citing dividend yields and cost efficiency as among its strengths.