The bank said Tuesday that adjusted pretax profit rose to $21 billion in 2017 on revenue of $51.5 billion. The 2017 result was less than the $19.7bn average estimate in a Reuters poll of analysts.
HSBC's shares were down 3.45%, or 26.2p, on the news, trading at 734.3p at 8:26am. Shore Capital analyst Gary Greenwood said the results were disappointing because profit was slightly weaker than expected and there was little news about returning cash to shareholders. Similarly, the lack of further share buybacks - for the moment hampered by the bank's efforts to shore up capital further - were the source of some disappointment, as was a slightly softer fourth quarter.
As Kate King reports, it was the last results report for CEO Stuart Gulliver, who steps down on Tuesday. He will be replaced by HSBC veteran John Flint, who most recently served as the bank's head of retail banking and wealth management. In addition to shifting its focus to Asia, the bank also scaled back some of its operations, including selling its Brazilian business. He has dealt with the after-effects of rapid expansion that caused the bank to lose its grip on activities in Mexico, where it was used to launder money by drug gangs, and Switzerland, where it admitted aiding aggressive tax avoidance.
"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 global 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.
"For now, HSBC yields about 4.8% which leaves it lagging behind Lloyds Banking Group whose dividend yield is more in the region of 6% based on forecasts for 2018".
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.
"The fundamentals of HSBC will remain the same as they always have - strong funding and liquidity, strong capital and a conservative approach to credit", he said.
HSBC said its pivot to Asia has been paying off, with the region, accounting for almost nine-tenths of total profits a year ago.
According to the accounts, he has earned an annual bonus of £2.1m in 2017 on top of £3.9m in salary.