HSBC’s profits miss targets following ‘challenging’ quarter
HSBC’S PROFITS missed expectations after a “challenging” fourth quarter that was hobbled by uncertainty surrounding the US-China trade dispute and Brexit.
The London-based banking giant’s pre-tax profits rose 16 per cent to 19.9 billion US dollars (£15.4bn) for 2018 compared with the previous year but fell short of analysts’ estimates of 21.3 billion dollars (£16.5bn).
Reported revenue increased 5 per cent to 53.8 billion dollars (£41.6bn).
London-listed shares fell 2.6 per cent to 647.5 dollars on the news.
HSBC’s common capital ratio, a measure of a bank’s financial strength, fell to 14 per cent at the end of last year from 14.5 per cent at the end of 2017 due to adverse foreign exchange movements and higher lending.
HSBC is Europe’s biggest bank but earns most of its profits from Asia and has been scaling up its business in the Far East.
Chairman Mark Tucker acknowledged the risks associated with uncertainty over global trade and warned that the USChina trade dispute is likely to continue this year.
“The system of global trade remains subject to political pressure, and differences between China and the US will likely continue to inform sentiment in 2019. However, the conclusion of major trade agreements... provide important counterweights that could give impetus to international trade in the year ahead.”
He added: “China remains subject to domestic and external pressures, but we expect it to maintain strong growth. We also expect further financial liberalisation to form part of China’s response to changing external conditions.”