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HSBC's 2014 profit down by 17%
[LONDON] HSBC Holdings Plc, Europe's largest bank, said full-year profit fell 17 per cent, more than analysts estimated, as costs increased and the company made provisions for fines and settlements.
Pretax profit for 2014 fell to US$18.7 billion from US$22.6 billion a year earlier, the London-based bank said in a statement. That missed the US$21.5 billion average estimate of 19 analysts surveyed by Bloomberg. Operating costs climbed 6.1 per cent to US$37.9 billion.
Chief Executive Officer Stuart Gulliver, 55, has exited 74 businesses since taking over in 2011 as the bank focuses investment on its most profitable markets, amid new regulations and spiraling compliance costs. HSBC's Chairman Douglas Flint, 59, is giving evidence to the UK Parliament on Wednesday after accusations that HSBC helped customers avoid taxes through its Swiss private bank.
"2014 was a challenging year in which we continued to work hard to improve business performance while managing the impact of a higher operating cost base," Mr Gulliver said in the statement. "Recent disclosures around unacceptable historical practices and behavior within the Swiss private bank remind us of how much there still is to do and how far society's expectations have changed in terms of banks' responsibilities." HSBC shares dropped 2.7 per cent to 589 pence at 8.19 am in London.
Pretax profit at the investment bank fell 38 per cent to $5.9 billion, exceeding the 23 per cent drop estimated by 16 analysts surveyed by the bank.