HSBC says profit dipped as it warns of 'bumpier' financial outlook

HONG KONG - HSBC warned of a "bumpier" global financial outlook thanks to China's slowing economy, as it reported Monday that profit dipped slightly last year.

See Full Article

Europe's biggest bank posted a net profit of $13.5 billion for 2015, down 1.2 per cent from the year before and below analysts' forecasts.

The bank also unexpectedly announced a $1.3 billion loss for the final quarter, compared with a $511 million profit in the same period the previous year.

Chairman Douglas Flint said the results were "broadly satisfactory." He said in a statement that last year was marked by "seismic shifts in global economic conditions," notably sharp falls in prices for oil and other commodities, partly stemming from slowing growth in China.

The London-based bank has been steadily trimming back its global operations as part of a sweeping reorganization announced last June in order to focus on Asia, where it expects the region's growing affluence to drive profits. Asia accounted for 83.5 per cent of HSBC's pre-tax profits last year. It's slashing thousands of jobs and selling off businesses in countries like Brazil while expanding in China, particularly the wealthy Pearl River Delta manufacturing region in the country's south.

HSBC said that cost cutting measures were already having an impact and it's now a "leaner business" than it was half a year ago.

However, Flint said challenges remain as growth ebbs in China, where the economy grew last year at its slowest rate in a quarter century.

"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," he said.

Growth in China's economy, the world's second biggest, dipped to 6.9 per cent last year as policymakers sought to shift away from growth based mainly on export-led manufacturing and investment toward greater reliance on consumer demand. Officials are forecasting growth of between 6.5-7 per cent this year.

Despite its focus on Asia, last month HSBC decided to keep its headquarters in London rather than moving it to Hong Kong, ending a 10-month review prompted by new U.K. regulatory and tax changes. The bank said keeping its base in London gave it the "best of both worlds." HSBC has a sizeable presence in Hong Kong, where it was founded to finance trade between China and Europe more than a century ago, when the city was still a British colony.

CEO Stuart Gulliver said HSBC gave up on plans to sell its Turkey business because it didn't get a good enough offer. It will restructure it instead.



Advertisements

Latest Economic News

  • Canada open to completing NAFTA talks in short order

    Economic CBC News
    Canadian negotiators are open to working on a timeline proposed by the U.S. to complete NAFTA renegotiations before the end of the year, CBC News has learned. A government source, speaking on background, tells CBC News that Canada is willing to work quickly, but will not agree to a bad deal for the sake of meeting a deadline. Source
  • U.S. wants NAFTA talks to wrap up before year's end, but is it possible?

    Economic CBC News
    Canadian negotiators are open to working on a timeline proposed by the U.S. to complete NAFTA renegotiations before the end of the year, CBC News has learned. A government source, speaking on background, tells CBC News that Canada is willing to work quickly, but will not agree to a bad deal for the sake of meeting a deadline. Source
  • B.C. premier and jobs minister sued by fired LNG advocate claiming $5M

    Economic CTV News
    VANCOUVER -- British Columbia's fired liquefied natural gas advocate is suing Premier John Horgan, the province's jobs minister and a New Democrat MP in a lawsuit claiming $5 million in damages. Gordon Wilson alleges in a statement of claim filed in B.C. Source
  • Millennials in Atlantic Canada most optimistic about owning homes

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • Can millennials afford to buy a home? It depends where they live

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • $500K hardship fund for former Sears Canada employees approved by judge

    Economic CBC News
    A judge has approved a hardship fund for former Sears Canada employees that will come from a pool of money set aside to pay bonuses for key employees. The $500,000 fund will help former employees facing difficulty who would have otherwise been eligible for severance payments when they lost their jobs at the retailer. Source
  • Elevated testosterone linked to 'reckless' financial trading, study finds

    Economic CBC News
    It's no secret financial traders have always been predominately male. So, when a group of researchers with the Ivey Business School at Western University in London, Ont., set out to at look at the role of testosterone on the markets, it wasn't a far-flung idea. Source
  • Brazil to ask for WTO panel to settle dispute over Bombardier subsidies

    Economic CTV News
    MONTREAL -- Brazil says it will ask the World Trade Organization to establish a dispute settlement panel after consultations with Canada failed to resolve its complaint about government subsidies to aircraft manufacturer Bombardier. The South American country said it will ask the WTO to examine more than 20 subsidy programs granted to the Montreal-based company for the development of its CSeries aircraft. Source
  • Bombardier employee in Swedish unit charged with bribery

    Economic CBC News
    A Russian employee in the Swedish branch of Canadian plane and train maker Bombardier was charged Friday with aggravated bribery and faces up to six years in jail and deportation if found guilty. Swedish prosecutor Thomas Forsberg alleges Evgeny Pavlov bribed a public servant in Azerbaijan to win a $340-million contract for a new signalling system. Source
  • Bombardier says Russian worker charged with bribery doesn't reflect its values

    Economic CTV News
    MONTREAL -- Bombardier says the filing of formal criminal charges in Sweden on Friday against a railway employee doesn't reflect its values. "We take these allegations very seriously as they assert conduct that does not reflect our values or the high standards we set for ourselves, our employees and our partners," the Montreal-based company (TSX:BBD.B) said in a statement. Source