HSBC misses profit, blames Brexit, trading tensions
HSBC Holdings PLC reported lower than expected fourth-quarter profit in Tuesday as chopped financial markets, US and China trading tensions and growth in world bank uncertainty.
HSBC shares doubled 2% in Hong Kong after the cost increase exceeded revenue at the end of 2018. The bank said that customers kept their business off as the markets became volatile last year and turned into global business and global markets. private bank and securities management. It reported an annual profit of $ 12.6 billion, less than the 13.71 billion analysts expected.
John Flint, CEO of HSBC, said the bank had been on track to meet quarterly cost control targets until revenues collapsed in parts of the bank in November. He said it was "very much the fourth quarter problem" and that the bank started in 201[ads1]9 in a "fundamentally different" position.
Herr. Flint marks its first year as CEO and did not signal any shifts in a strategy update on HSBC's focus on Asia for growth. He said the trade conflict between the US and China had no effect on the customer's credit quality, but had resulted in weaker loan demand. HSBC chairman Mark Tucker in a statement Tuesday said the differences between the US and China are likely to continue to "inform sentiment" this year.
The bank said it adjusted its provisions for potential losses on trading and tariff-related lending, and took a $ 165 million charge in the fourth quarter to reflect the increased level of financial uncertainty in the UK from its departure from the EU.
Herr. Flint said the bank is prepared for Brexit, but that the uncertainty surrounding the terms of the exit has led some companies to delay the investment and that "customers are desperate for security."
The entire year's income on the bank was $ 53.78 billion, up from $ 51.4 billion in 2017. Quarterly revenue was above HSBC, but some units posted double-digit decline.
Mr. Flint said the turn of the bank's US business is still a work in progress and that it still has "a long way to go" to get a 6% return on equity targets by 2020.
Also on Tuesday, HSBC said the European Commission has asked for information on potential co-ordination in the foreign exchange market. It said the case is at an early stage.
– Joanne Chiu contributed to this article.
Write to Margot Patrick at margot.patrick@wsj.com and Chester Yung at chester.yung@wsj.com [19659012]
