“We remain confident in the resilience of the Chinese economy, and the growth opportunities in mainland China over the medium to long term,” chief executive officer Noel Quinn said. — Bloomberg
LONDON: HSBC Holdings Plc has reported fourth-quarter profit fell 80% after taking charges on holdings in a Chinese bank and from selling its French retail operations.
Pre-tax profit fell US$1bil in the final three months of last year from US$5.05bil from a year earlier, the London-headquartered company said in a statement. The lender took a US$3bil charge on its holding in Bank of Communications and a US$2bil charge on its French sale.
The bank also announced a US$2bil buyback and a fourth quarter interim dividend of 31 US cents a share.
“We remain confident in the resilience of the Chinese economy, and the growth opportunities in mainland China over the medium to long term,” chief executive officer Noel Quinn said in the statement.
While rising interest rates globally have boosted HSBC’s earnings, the bank has faced headwinds over the past year in China, one of its key growth markets.
The ongoing real estate meltdown has not only hurt the world’s second-largest economy, but has also forced HSBC to set aside money to cover potential losses.
The bank has also seen its returns hampered by interest rate hedges that ended up losing hundreds of millions of dollars.
HSBC is several years into a strategy of pivoting its business increasingly towards the faster-growing markets of Asia where the bank makes most of its money.
Disposals of businesses in France and Canada have been balanced by acquisitions of insurance and wealth management assets in Asia, a region with swelling ranks of the wealthy. Further acquisitions are on the cards.
Quinn said last year that if he saw the opportunity to grow the business through more bolt-on deals, he would do it.
But he also cautioned against the idea that the bank would engage in major acquisitions. — Bloomberg
