HSBC cites 'largely unexpected economic and political events' in explaining 2016 results

HSBC cites 'largely unexpected economic and political events' in explaining 2016 results
HSBC cites 'largely unexpected economic and political events' in explaining 2016 results

HSBC Holdings' 2016 pre-tax profit fell 62 percent, below analysts' estimates, as it grappled with slowing economic growth in its core markets of Hong Kong and Britain and took one-time charges related to some of its businesses.

HSBC reported profit before tax for 2016 of $7.1 billion compared with $18.87 billion the year before and below the average analyst estimate of $14.4 billion according to Thomson Reuters data.

The 2016 profit reflected a $3.2 billion impairment of goodwill in its global private banking business in Europe and the impact of its sale of operations in Brazil, the bank said in a statement to the stock exchanges on Tuesday.

HSBC's shares have been among the best-performing European bank stocks since Britain voted in June to leave the European Union, climbing 53 percent against a 28 percent increase in the STOXX Europe index of 600 banks as the bank benefited from appreciation of the U.S. dollar and stronger capital levels.

Douglas Flint, the group's chairman, struck an optimistic tone in a statement accompanying the results.

"The Group has improved its productivity, embraced technological change and continues to reinforce its standards of business conduct. It has a strong capital position and is gaining market share in important areas," he wrote.

"2016 will be long remembered for its significant and largely unexpected economic and political events. These foreshadowed changes to the established geopolitical and economic relationships that have defined interactions within developed economies and between them and the rest of the world. The uncertainties created by such changes temporarily influenced investment activity and contributed to volatile financial market conditions. Against this background, HSBC's performance in 2016 was broadly satisfactory."

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