HSBC 2015 profit nearly flat, sees bumpier environment ahead

Tuesday, 23 February 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: HSBC said it saw a ‘bumpier’ financial environment ahead after delivering flat 2015 profit growth against a bleak backdrop of slowing growth in China and tumbling commodities prices.

HSBC reported profit before tax of $18.87 billion for 2015 against $18.7 billion the year before, below the average analysts’ estimate of $21.8 billion, according to Thomson Reuters data. On a quarterly basis, it reported a pre-tax loss of $858 million.

In its earnings statement, the bank said it was going to stick to delivering on a June strategic plan centered around further expanding into China.

But it added that the economic slowdown there was making the environment more challenging.

“China’s slower economic growth will undoubtedly contribute to a bumpier financial environment, but it is still expected to be the largest contributor to global growth as its economy transitions to higher added value manufacturing and services and becomes more consumer driven,” HSBC Chairman Douglas Flint said.

Last year, Asia represented 83.5% of global pre-tax profit for HSBC, a larger portion than a year earlier and a sign that the bank’s future growth is tied to the region’s.

Europe’s biggest bank, which just over a week ago decided not to move its headquarters to Hong Kong, proposed to hike its dividend to $0.51 per ordinary share against $0.50 a year earlier.

This is a relief to investors who had worried the lender’s more constrained capital position would cause management to abandon the goal of progressive dividend growth.

In 2014, HSBC recorded a bill of $3.7 billion for provisions, fines, and settlements with regulators.