HSBC’s fortune turned around in 2017 with an increase in the year’s profit.
The bank, largest in Europe by assets, said Tuesday its full-year profit before tax rose 10.9 percent to $20.99 billion after adjusting for foreign currency translation and one-off items. That’s beating the estimated $19.59 billion by Reuters and reversing the decline seen one year ago in 2016.
The bank’s adjusted revenue for 2017 was $51.5 billion, up 5 percent from the previous year.
Analysts had expected higher interest rates to boost HSBC’s lending profitability, resulting in the improved financial performance.
“I think they will have another, not a record, but better-than-expected earnings,” Dickie Wong, executive director of Kingston Securities, told CNBC ahead of the release of the financial report.
The bank’s Hong Kong-listed shares, a heavyweight on the Hang Seng Index, traded 1.26 percent higher at 11 a.m. HK/SIN.
Wong added that HSBC is “in a better shape” compared to other international banks, and investors would be looking for another round of share purchases, though not at the levels previously seen. The bank has bought back $5.5 billion worth of shares from investors since August 2016.
Stuart Gulliver, instrumental in turning around HSBC, will step down as the bank’s chief executive after 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.
HSBC’s latest earnings statement cemented its ability to pick itself up after the global financial crisis. In addition to shifting its focus to Asia, the bank also scaled back some of its operations, including selling its Brazilian business.
“These results and the achievements of the last couple of years give us a great platform to build on,” said Flint in a release that accompanied the earnings announcement.