22nd Feb 2016 05:16
LONDON (Alliance News) - HSBC Holdings PLC on Monday reported a 1.0% increase in full-year pretax profit, missing analyst expectations after a loss-making fourth quarter.
HSBC lifted its dividend for the year as a whole to USD0.51 from USD0.50, as pretax profit rose to USD18.87 billion in 2015, from USD18.68 billion in 2014.
Coming one week after HSBC decided to remain in the UK, rather than move to its historic home of Hong Kong, the results missed analyst expectations of an annual USD21.78 billion pretax profit, according to consensus estimates compiled by the bank.
HSBC made a fourth-quarter pretax loss of USD858.0 million, compared with a USD1.73 billion pretax profit in the corresponding three months of 2014.
Net operating income, which is stated before loan impairment charges and other credit risk provisions, decreased to USD11.77 billion in the fourth quarter, from USD14.31 billion the corresponding quarter the prior year, taking the full-year figure down to USD59.80 billion from USD61.25 billion.
Fourth-quarter operating expenses increased to USD11.54 billion from USD11.89 billion, helping to reduce full-year costs to USD39.77 billion from USD41.25 billion.
The unanimous board decision in favour of London, where HSBC moved in the wake of its acquisition of Midland Bank in 1992, allows Chief Executive Officer Stuart Gulliver to concentrate on achieving targets set out at an investor update in June 2015.
Gulliver's "pivot to Asia" strategy is designed to shift billions of dollars' worth of risk-weighted assets into the Pearl River Delta, the central part of Guangdong province on China's south coast, in an effort to improve returns. Cutting annual costs, to the tune of up to USD5.0 billion by 2017, forms another important element of the plan to improve the bank's financial performance.
HSBC said it has reduced risk-weighted assets by USD124 billion so far, meaning that about 45% of its target for 2017 has been achieved. The bank expects further reductions in 2016, in addition to a decrease of around USD33 billion from the sale of its business in Brazil, though the sale of its business in Turkey has fallen through.
"We have received a number of offers for our business in Turkey since June, none of which were deemed to be in the best interests of shareholders. We have therefore decided to retain and restructure our Turkish operations, maintaining our wholesale banking business and refocusing our retail banking network," Gulliver said.
By Samuel Agini; [email protected]; @samuelagini
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