HSBC says 2016 net profit dived 82%

A pedestrian walking past a HSBC signage in the Central district of Hong Kong.
A pedestrian walking past a HSBC signage in the Central district of Hong Kong.PHOTO: BLOOMBERG

HONG KONG (AFP) - HSBC said Tuesday (Feb 21) that net profit fell 82 per cent in 2016, calling it a period remembered for its "largely unexpected economic and political events", while it warned of further uncertainty this year.

The net profit of US$2.48 billion (S$3.52 billion) compared with $13.52 billion recorded in 2015, with group chairman Douglas Flint saying geopolitical changes contributed to "volatile financial market conditions".

The bank also swung to a US$3.45 billion pre-tax loss in the final quarter of the year.

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

On the impact of Brexit, he reaffirmed earlier reports that "current contingency planning suggests we may need to relocate some 1,000 roles from London to Paris progressively over the next two years, depending on how negotiations develop".

Like most global banks, HSBC has been struggling to boost profits as uncertainty caused by Britain's looming exit from the European Union casts a shadow over the sector.

HSBC in 2015 announced a radical overhaul to cut annual costs by US$5 billion over two years by shedding 50,000 jobs worldwide, exiting unprofitable businesses and focusing more on Asia.

On top of that, it has been grappling with stricter capital rules, low interest rates and scandals stemming from its own misbehaviour.