Sci-tech

HSBC pre-tax profits tumble 62.3 per cent

HSBC pre-tax profits tumble 62.3 per cent”

HSBC profits plunged previous year on huge writedowns and restructuring charges, the banking group said on Tuesday.

The London-headquartered bank said its net profit tumbled to $1.29 billion in 2016, down 90 percent on a year earlier.

CEO Stuart Gulliver told reporters on a conference call that he could not estimate the impact of the investigation but that it reflected the bank finding more "bad actors" among its clients as it improves controls.

Profit before tax stood at $7.1bn, down 62% after HSBC slashed the value of its private banking activity in Europe $3.2bn because of a 1999 acquisition.

European operations ended the year with a $6.77 billion loss, tumbling from $683 million in profit for 2015 amid heavy goodwill impairment charges at the private banking business.

Banking shares are under pressure today after HSBC Holdings plc (LON:HSBA) reported disappointing full year profits - the first of the UK's major lenders scheduled post annual results this week.

HSBC said its restructuring is largely complete.

"We highlight the threat of populism impacting policy choices in upcoming European elections, possible protectionist measures from the new USA administration impacting global trade, uncertainties facing the United Kingdom and the EU as they enter Brexit negotiations", Flint said in his statement, which was filed to the Hong Kong stock exchange.

Britain's FTSE 100 index .FTSE, dominated by several global banks, underperformed.

The bank revealed that it is under investigation by Britain's Financial Conduct Authority over possible money laundering by some of its customers. "We are gaining market share in areas of importance to HSBC as others scale back and our offerings become more competitive".

The bank the search for a successor to Flint in 2017 "remains on track". However, $3.2bn was knocked off the goodwill of the bank's private banking unit in Europe, and HSBC's main markets of Hong Kong and the United Kingdom underperformed.

As if that was not enough the bank has also received requests for information from various regulatory and law enforcement authorities around the world concerning persons and entities believed to be linked to Mossack Fonseca & Co., which the bank says could be significant.

However, InterContinental Hotels Group (IHG.L) rose almost 2 percent after reporting a slightly better-than-expected yearly profit rise.

But it said again that it may need to relocate 1,000 staff from London to Paris in the next few years as the European Union heads for exit.



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