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HSBC profit dives sharply

August 3, 2016

UK-based multinational banking company HSBC has reported a hefty drop in second-quarter profit as it struggles to refocus its business after Britain's pro-Brexit vote. The group keeps focusing on its Asia business.

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Image: picture-alliance/dpa/F. Arrizabalaga

HSBC reported Wednesday its pre-tax profit had almost halved in the second quarter as the lender headed into "a period of heightened uncertainty" after Britain voted to leave the European Union.

Operating earnings dipped by 45 percent in the period from April to June year-on-year, to $3.61 billion (3.22 billion euros), missing forecasts by analysts.

"It is evident that we're entering heightened uncertainty where economic risks are being overshadowed by political and geopolitical events," Group Chairman Douglas Flint said in a statement.

SwissLeaks - the HSBC money laundering machine

Reorientation needed

Flint added that establishing fresh terms of trade with the EU and global partners would be "complex and time-consuming" and would require the bank to reposition in Europe.

HSBC last year announced radical cost-cutting measures that included shedding 50,000 jobs worldwide, exiting unprofitable businesses and focusing on Asia.

"Nothing that has happened in this turbulent period casts doubts on the strategic direction and priorities we laid out," Flint said, adding that southern China's Pearl River Delta would be a priority area of activity for the lender.

HSBC on Wednesday announced a share buyback of up to $2.5 billion (2.2 billion euros) for the second half of 2016, to be funded by the selloff of its Brazil business. It said dividend payouts were not in danger "in the foreseeable future."

hg/mrk (AFP, Reuters)