HSBC annual profit disappoints as CEO Gulliver says goodbye

HSBC said its pivot to Asia has been paying off

HSBC said its pivot to Asia has been paying off

Greenwood said: "The dividend was maintained but there is no indication as to when growth may resume".

And the bank said the prospect of regional Asian trade deals and lending linked to China's Belt and Road projects "provided cause for optimism". The profit figure fell short of the $19.59 billion analysts estimated in a Reuters poll, and appeared to weigh on its stock. HSBC already paid about 300 million euros ($370 million) to settle a criminal investigation by the French government into allegations it helped clients evade taxes, the second-biggest corporate charge levied by an authority in the nation in November a year ago.

Meanwhile, shares of Hang Seng Bank, which is majority controlled by HSBC and also reported earnings on Tuesday, slid 1.6% to HK$189.20 despite beating market expectations.

The losses helped drive down adjusted pretax profit to $3.6 billion in the fourth quarter, undershooting the lowest estimate among five analysts surveyed by Bloomberg News. He will be replaced by HSBC veteran John Flint, who most recently served as the bank's head of retail banking and wealth management.

HSBC's reported revenues rose to $51.4bn from $48bn a year ago.

Reported Loan impairment charge and other credit risk provisions or LICs of $1.8 billion were 48 percent lower, in part reflecting the impact of the sale of operations in Brazil in 2016.

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However, William William Howlett, bank analyst at Quilter Cheviot, noted several positive takeaways from HSBC's latest update and said the bank looked to be "in good shape" as Gulliver departs. Net interest income fell 5.5% on-year to $28.18 billion, dropping for a sixth straight year.

"We have been waiting for so long for the comeback of HSBC and I do really think that they are in better shape than other worldwide banks", said Dickie Wong of Kingston Securities Limited, citing dividend yields and cost efficiency as among its strengths. "All our global businesses grew adjusted profits and we concluded the transformation programme that we started in 2015", he said. HSBC is "firmly on the course set by Stuart and Douglas Flint with more to go for; it would be great if they get to a 10 percent return on equity from the current 5.9 percent", referring to the industry's measure of profitability.

Analysts cited the lack of a reliable growth engine due to inconsistent markets and the threat of U.S. interest rate hikes as problematic for the bank, with a lack of clarity on share buybacks weighing on the stock price.

Gulliver, 58, said earlier in a statement that HSBC is "simpler, stronger and more secure" than when he became Group CEO in 2011, as the bank cut billions of dollars in annual costs and pared its exposure to slow-growth markets.

HSBC shares fell as much as 3.2 per cent in Hong Kong following the announcement, as investors registered the profit performance and disappointment over the absence of a share buyback.

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