Rich inheritance

20 February 2018 By Christopher Thompson Follow @CGAThompson

The departing CEO largely achieved his goal of creating a “simpler, stronger” bank. Though return on equity was below 10 pct last year, higher interest rates and fewer fines will help HSBC hit that target too. Successor John Flint’s challenge is to identify new sources of growth.

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HSBC on Feb. 20 said pre-tax profit more than doubled to $17.1 billion in 2017 on revenue which increased by 7 percent to $51.4 billion. Adjusting for currency differences and one-off items, underlying pre-tax profit rose 10.9 percent to $21 billion.

The bank said its common equity Tier 1 capital ratio was 14.5 percent at the end of December, up from 13.6 percent a year ago. Its leverage ratio was 5.6 percent, up from 5.4 percent.

The bank reported a return on equity for the year of 5.9 percent, up from 0.8 percent in 2016. Excluding exceptional charges and the UK bank levy ROE was 8.2 percent, up from 7.9 percent.

HSBC announced a fourth interim dividend of 21 cents per share bringing the full year dividend to 51 cents per share, unchanged from the previous year.

John Flint, previously HSBC’s head of Retail Banking & Wealth Management, is set to replace Stuart Gulliver as chief executive on Feb. 21.

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