HSBC profits up in first half of 2017

HSBC profits up in first half of 2017

HONG KONG-Agence France-Presse
HSBC profits up in first half of 2017


HSBC said profits were up in the first half of the year after a turbulent 2016 which saw huge writedowns and restructuring costs as it laid off thousands of staff.

The Asia-focused giant has been on a recovery drive over the past two years, streamlining its operations and exiting unprofitable businesses.

Like many global banks it has struggled to boost profits as China’s economy slows and uncertainty caused by Britain’s looming exit from the European Union casts a shadow over the sector.

In addition, HSBC has grappled with stricter capital rules, low interest rates and scandals stemming from its own misbehavior.     

However, the results on July 31 were an improvement as analysts said its overhaul was bearing fruit.     
Reported pre-tax profit for the six months to June rose five percent to $10.2 billion compared with $9.7 billion for the same period last year.

Shares closed up 2.62 percent at HK$78.45 ($10.06) in Hong Kong on July 31.     

The half-year results showed operating expenses dropped 12 percent to $16.4 billion, partly stemming from a sell-off of its Brazil operations.  
Chairman Douglas Flint described the performance as “extremely pleasing.”

Flint said there were still uncertainties due to increasing geopolitical tensions and “ambiguous predictions” around Britain’s future relationship with the EU post-Brexit, but described HSBC’s performance as resilient.     
In his last statement as chairman before stepping down in October, Flint warned over the possible repercussions of the Brexit deal.

“The essential questions that have to be addressed are whether, at the conclusion of the negotiations, the economies of Europe will continue to have access to at least the same amount of financing capacity and related risk management services, and as readily available and similarly priced, as they have enjoyed with the U.K. as part of the EU,” he said in a statement.

Flint also called for more progress on preventing “bad actors” from accessing the financial system.     
“As digitalization of commercial activity increases, the risks of confidence-threatening disruption and economic loss, not least from cyber-attacks, are amplified,” Flint said.  
Net profit for the first half of the year rose 10 percent to $6.99 billion from $6.36 billion for the same period in 2016.

Pre-tax profits for the second quarter rose $1.7 billion to $5.3 billion year on year, beating Bloomberg analysts’ estimates, which had averaged out at a $4.6 billion forecast.     

HSBC also announced a share buyback of up to $2 billion, expected to be completed in the second half of the year.

The bank announced the appointment of a new chairman in March as part of a management overhaul that will also see it choose a new chief executive to replace Stuart Gulliver, following a massive drop in 2016 profits.