HONG KONG — HSBC profits climbed in 2018 despite a bruising final quarter as worries over the global economy and the US-China trade war began to bite, the banking giant said Tuesday.
The London-headquartered behemoth told investors it was still aiming to meet targets despite the looming twin storms of Brexit and the long-running trade impasse between Washington and Beijing.
But analysts warned it remained vulnerable to any fallout from either issue becoming a full-blown crisis in 2019.
Overall, last year saw strong growth for HSBC with net profit ballooning 30 percent to $12.6 billion.
Profit before tax climbed 16 percent to $19.9 billion.
The results capped the first full year at the helm for chief executive officer John Flint, who has vowed growth while keeping a lid on costs.
But the yearly growth figures were dampened by a tough final quarter when the markets - especially those in Hong Kong and China - went into meltdown over global trade fears.
Adjusted pre tax profit fell one percent to $3.4 billion in October-December, missing the $4.4 billion forecast by analysts.
In its annual report, HSBC said its «expected credit loss» impairment allowance had increased by $165 million to $410 million because of «the increased level of economic uncertainty in the UK».
HSBC had already announced that some operations were moving from London to Paris because of Britain›s EU departure next month.
«Our existing footprint in the EU, and in particular our subsidiary in France, has provided a strong foundation for us to build upon,» the bank said Tuesday.
Analysts have said that while Britain crashing out of the EU with no deal in place would hit banks hard, HSBC is more insulated than many of its British competitors partly because so much of its business is based in Asia.
Chairman Mark Tucker on Tuesday said «the fundamentals for growth in Asia remain strong in spite of a softer regional economic outlook».
«The system of global trade remains subject to political pressure, and differences between China and the US will likely continue to inform sentiment in 2019,» he said.
Tucker added that progress on trade deals between the EU, Singapore and Japan - as well a large deal among Pacific trading nations - helped cushion those jitters.
HSBC posted a healthy doubling of profits in 2017 but it faced some troubling years before that.
The bank had to lay off tens of thousands of staff as part of a wide-ranging overhaul that also saw it sell its Brazil operations in 2015 and also had to pay out huge money laundering penalties earlier in the decade. — AFP
