Berliner Tageszeitung - HSBC pre-tax profit slumps on France sale

Pre-tax profit slid more than seven percent to $17.5 billion (16.4 billion euros) last year, after a vast $2.4-billion impairment on the planned divestment of the French unit.

The London-listed finance giant added that revenues grew four percent to $51.7 billion, with banks benefitting from higher interest rates.

Net profit jumped almost a fifth to $14.8 billion on underlying growth in key areas as HSBC tilts away from Western markets and refocuses on Asia.

"The results we've announced today evidence there's been improvement in the business," chief executive Noel Quinn told reporters.

"We fundamentally transformed the profitability of what were loss-making, or near near-loss making businesses in the United States and in Europe," he added.

HSBC agreed in 2021 to sell its French retail activities to French lender My Money Group for a nominal one euro.

However it stated at the time that it would not complete the deal until the first half of 2023.

The news came after it announced plans to exit the retail and small business banking market in the United States, as part of a pivot towards Asia.

The lender acknowledged the tough global economic climate international banks are facing.

It cited renewed virus outbreaks in Hong Kong and mainland China as denting last year's economic growth.

- Cost-of-living crisis -

HSBC added that global uncertainty over Russia's invasion of Ukraine, elevated inflation and rising interest rates have sparked a cost-of-living crisis and fears of rising bad debts.

That has contributed to a difficult financial environment that will extend into 2023.

"We are already seeing... a cost-of-living crisis affecting many of our customers and colleagues," noted chairman Mark Tucker.

The lender has vowed to accelerate a multi-year pivot to Asia and the Middle East, and its ambitions to lead Asia's wealth management market has shown early signs of success.

In November, the bank agreed to sell its Canadian division for $10.1 billion, saying it would use the funds to invest in its core business and return cash to investors.

The Canadian sale comes after a months-long campaign by HSBC's biggest shareholder and Chinese insurance giant Ping An to cut costs and shift more resources to Asia.

Ping An has argued that spinning off HSBC's Asian operations will unlock shareholder value amid tensions between China and Western powers, though the bank has rejected the move.

HSBC announced Tuesday a full-year dividend of $0.32 per share after what it described as "a strong overall financial performance".

In reaction, investors sent HSBC shares 3.3 percent higher to 1,220 pence near midday, topping the gainers board on London's declining FTSE 100 index.

"HSBC's sheer scale and financial strength continue to ease the costs of its transformation to a more Asian-focused bank," noted Richard Hunter, head of markets at Interactive Investor.

P. Hansen--BTZ