The hangover from the murky past of HSBC's private banking business is still lingering.
HSBC (HSBC)
on Tuesday reported a net loss of $4.2 billion for the fourth quarter
of 2016. The biggest single hit to its battered bottom line came from a
$2.4 billion writedown of the value of its private banking business in
Europe.
The global banking giant has spent years shrinking
down and cleaning up its private banking operations, notably in
Switzerland. The business came under scrutiny over revelations it catered to weapons dealers, tax evaders and dictators.
HSBC's fourth-quarter results also suffered from lower revenue and
higher costs than the same period a year earlier, when it posted a net
loss of $1.3 billion.
The bank's shares were trading down around 5% in Hong Kong after it published the earnings report.
Its ugly results follow hefty losses reported by other major European banks in recent weeks, including Deutsche Bank (DB) and Credit Suisse (CS).
HSBC has been cutting tens of thousands of jobs
in recent years as it tries to overhaul its sprawling businesses to
keep up with changes in the global economy. Last year, it sold off its
operations in Brazil.
"We enter 2017 with the
restructuring of the group essentially completed, and with a strong
capital position and a conservative balance sheet," Chairman Douglas
Flint said in a statement.
But the bank is also facing
uncertainty arising from the political shocks last year of Britain's
vote to leave the European Union and Donald Trump's victory in the U.S.
presidential election.
Flint warned of risks from populism influencing European elections this
year, possible protectionist measures from the Trump administration
affecting world trade and the big unknown of Britain's negotiations to
exit the EU.
HSBC, Britain's largest bank, has already said it could move about 1,000 jobs from London to Paris to deal with the repercussions of Brexit.
Ref;http://money.cnn.com/2017/02/21/investing/hsbc-loss-bank-earnings/index.html?sr=fbmoney022217hsbc-loss-bank-earnings0433AMVODtopLink&linkId=34744956
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