Earnings of HSBC failed to meet market expectations


The bank said Tuesday that adjusted pretax profit rose to $21 billion in 2017 on revenue of $51.5 billion.

The bank's annual report showed Mr Gulliver enjoyed a 7% rise in his pay packet that pushed his annual salary back up past £6 million - having seen it drop from £7.3 million to £5.7 million a year earlier.

"There is no change in our strategy regarding share buybacks", he said. Share buybacks will be performed as and when appropriate. "It has been my great privilege to lead HSBC for the last seven years, and in handing over to John I am confident the organisation is in great hands".

HSBC Holdings Plc said it could face penalties exceeding $1.5 billion stemming from multiple investigations into claims that its Swiss private bank unit helped clients evade paying taxes.

HSBC said 2017 was marked by broadly stable but persistently low interest rates and increasing excess liquidity in the market, while attractive investment opportunities remained limited.

HSBC, Europe's largest bank, has been focusing on a drive to streamline its business and slash costs.

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HSBC has definitely pinned its flag to the Asian mast, with over three quarters of profits now coming from the far east.

However this approach comes with risks attached. HSBC has repurchased $5.5 billion since mid-2016 and analysts at UBS Group AG forecast another $4 billion this year. HSBC already paid about 300 million euros ($370 million) to settle a criminal investigation by the French government into allegations it helped clients evade taxes, the second-biggest corporate charge levied by an authority in the nation in November previous year. That's all well and good, but this cuts both ways, and looking forward if China sneezes, HSBC is going to catch a nasty cold. It's not been plain sailing by any means, and he deserves credit for steering the bank though some hard waters, not least the money laundering scandal which cost the bank $1.9 billion in fines and a deferred prosecution agreement with United States authorities which has only just ended.

But last month HSBC agreed to pay more than $100 million to United States authorities in another case, after admitting to defrauding clients during multi-billion-dollar foreign exchange transactions.

HSBC grew revenues in its investment banking division by a more modest 3 per cent, a relatively strong performance given the subdued market environment throughout 2017 that hammered banks' bond trading income in particular.

The Board recommended maintaining a current dividend payout ratio of 65% of net profit, and return part of retained earnings to the shareholders and recommended an extraordinary dividend of €20m in addition to the regular dividend paid out of the net profit for the year. "Moreover, the dollar is weaker against the pound year-on-year, so in sterling terms, even a modest increase is likely to be obscured by exchange-rate effects".