Europe’s largest bank reports 62% Drop in Profits

Europe’s largest bank has reported a $7.1 billion (£5.7bn) pre-tax profit for 2016, down 62% on the $18.9bn reported a year earlier.

HSBC attributed the fall to a string of one-off charges, including the sale of its operations in Brazil.

HSBC said its performance had been “broadly satisfactory” given “volatile financial conditions” but warned a rise in global protectionism was a concern.

The bank also announced a smaller-than-expected share buyback. That also helped undermine shares, which were down by more than 6% in London.

Alluding to the US election and the UK’s vote to leave the European Union, HSBC said 2016 would “be long remembered for its significant and largely unexpected economic and political events”.

“The uncertainties created by such changes temporarily influenced investment activity and contributed to volatile financial market conditions.”

Looking ahead to 2017, the bank said the “outcome of the US election has added to concerns about a rise in protectionism”.

“This has been accentuated in many parts of the world by technological change and income inequality.”

Despite the fall, HSBC announced a new $1 billion share buy-back, taking buy-backs since the second half of 2016 to $3.5 billion, as the bank returns cash to shareholders after the sale of its Brazil business last July in a $5.2 billion deal.

Sources; BBC, Reuters