HSBC boss blames 62% profits slump on shock votes for Brexit and Trump

THE boss of high street banking giant HSBC today admitted that the “unexpected” shocks of the Brexit vote and Donald Trump’s presidential election triumph were partly to blame for a huge slump in profits.

Chairman Douglas Flint said that the “uncertainties” thrown up by the twin political earthquakes of 2016 “tempo- rarily influenced investment activity and contributed to volatile financial market conditions”.

The Canary Wharf based lender, which i s Europe’s big gest bank , employing 240,000 people worldwide, made pre-tax profits of $7.1 billion (£5.7 billion) last year, down 62 per cent on 2015.

The City was dismayed by the worse than expected financial results and a slump in the share price wiped £9 bil- lion off the bank’s value. Analysts had been expecting profits of around $14.4 billion.

Mr Flint said that 2016 “will be long remembered for its significant and largely unexpected economic and political events” but insisted that the bank’s performance was “broadly satisfactory” considering such turbulent conditions.

A series of one-off charges, such as the sale of its Brazilian operations, were the main factors in the downturn in HSBC’s profits.

There was also a warning that the unpredictable age of populism and the fall-out from the reaction against globalism is likely to continue far into 2017.

Mr Flint cautioned over risks from “upcoming European elections, possible protectionist measures from the new US administration impacting global trade, uncertainties facing the UK and the EU as they enter Brexit negotiations, and the impact of a stronger dollar on emerging economies with high debt levels”.

Chief executive Stuart Gulliver told the Standard: “The pushback against globalisation is something we need to be mindful of. The first step towards an answer is recognising that there is a problem. Business has a responsibility to recognise it.”

He said globalisation “has not benefited all people equally” adding that “the protectionist stance is clearly a negative for us. Clearly we are freetraders”.

HSBC confirmed that the vote to quit Brussels meant it “may need to relocate some 1,000 roles from London to Paris progressively over the next two years, depending on how ne gotiations develop”.

The bank also revealed that some bosses have had their pay cut because of slow progress in complying with tougher new anti-money laundering rules. However, the bank still paid 245 staff at least £1 million in 2016 and Mr Gulliver’s total package is on track to rise to £7.7 million from £7.3 million.

Mr Gulliver said: “By the end of this year, we are on track to have our antimoney laundering and sanctions policy framework in place and to have introduced major compliance IT systems across the group.”

The shares slumped more than six per cent, or 45.8p to 666.5p. Analysts had been expecting profits of around $14.4 billion.