HSBC Worried About Trump Trade Policy as Net Loss Widens--Update

By Margot Patrick and Joanne Chiu 

HSBC Holdings PLC warned that a changed U.S. stance on global trade could harm its business as it reported worse than expected fourth-quarter results Tuesday.

The Asia-focused lender's net loss widened sharply to $4.23 billion in the three months to end-December from $1.33 billion in the same period the year before on around a 24% decline in revenue to $8.98 billion. The bank also booked a series of charges including one for goodwill impairment at its slimmed-down private bank.

HSBC said it would buy back as much as $1 billion in shares, adding to $2.5 billion bought back last year, and left the door open for further buybacks as capital is freed up at its U.S. business this year.

Chairman Douglas Flint said possible protectionist measures from the new U.S. administration under President Donald Trump could have an impact on global trade, adding to other political uncertainties for the bank including the U.K.'s planned exit from the European Union.

Chief Executive Stuart Gulliver said in an interview that any U.S. protectionism "at first blush is negative to us," though it might be countered by growing intra-regional trade in Asia and elsewhere.

HSBC's Hong Kong-listed stock fell 4% on Tuesday. The stock had gained around 49% as of Monday since its recent trough in mid-June, mainly on expectations that future U.S. interest-rate rises will lift margins and revenue.

HSBC has undergone a major restructuring since 2011 under the leadership of Mr. Gulliver and Mr. Flint, exiting from most of Latin America and placing more focus on Asia. Mr. Flint is set to step down after a replacement is announced this year, and then the new chairman will seek a successor to Mr. Gulliver. There was no update on that plan Tuesday.

The global banking major's full-year net profit was $1.30 billion, down sharply from net profit of $12.6 billion in the previous year. Full-year revenue fell more than 19% to $47.97 billion.

Write to Margot Patrick at [e-mail] and Joanne Chiu at [e-mail]

(END) Dow Jones Newswires

February 21, 2017 03:29 ET (08:29 GMT)

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