HSBC announce increased profits for 2017. HSBC has announced pre-tax profits of $17.2bn (£12.3bn) for 2017 and say the growth has been primarily fuelled by its expansion in Asia. These figures represent a rise of 141% on the $7.1bn profits announced for 2016. It has to be said the figures for 2016 did include a number of costs, and the announced profits for 2017 were nowhere near pre-tax profit figures announced for the year 2015.
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HSBC is the largest banks with global reach and has increased focus on the Asia market considerably over recent years. The bank commented that wealth management and retail and commercial banking have been key drivers for growth across Asia. It has an increased presence within the Chinese Pearl River Delta area, where it is heavily involved within the infrastructure and real estate sectors. Pre-tax profits from Asia amounted to $15.3bn for the year, representing a rise of 89.3%. In contrast, the bank recorded European losses for the period amounting to $1.9bn, despite the fact that revenues had increased by 7% to $51.4bn. Within Europe HSBC has spent recent months concentrating on streamlining the business in efforts to cut costs.
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Cause For Optimism
A bank spokesperson commented that regional trade deals in Asia and lending linked to Belt and Road projects in China gave “cause for optimism“, while Group Chairman, Mark Tucker, said the large increase in reported profits before tax “reflected both a healthy business and the non-recurrence of significant items from 2016″.
Although HSBC’s announcement reflects a great improvement on its results for 2016, they are still significantly less than the $18.9bn reported for 2015 and the market reacted accordingly with HSBC share prices dropping in both Hong Kong and London. Hong Kong recorded a drop of 3.1% in the price of the bank’s shares, while London saw prices drop by 4% in the morning trade. Analysts have commented that the HSBC focus on Asian trade makes sense in many ways as the numbers of middle class and executives are set to balloon over the next 30 years, however, it is risky as it’s too dependent upon a better than average Chinese economic performance.
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