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HSBC’s pre-tax profit for 2019 fell 33% to $13.35 billion, missing expectations

HSBC logo is open out outside a branch of in the United Kingdom.

Matt Cardy | Getty Images

HSBC on Tuesday reported a 32.9% collapse in pre-tax profit for 2019 to $13.35 billion — missing expectations by analysts. 

The bank, Europe’s largest by assets, voted it took a goodwill impairment of $7.3 billion, mainly relating to its investment banking and commercial banking businesses in Europe. 

HSBC also utter it will “continue to monitor the recent coronavirus outbreak, which is causing economic disruption in Hong Kong and mainland China and may impression performance in 2020.”

Here are other financial metrics that the bank reported:

  • Revenue for 2019 was $56.1 billion
  • Earnings per dividend was $0.30

Prior to the latest earnings release, analysts had expected HSBC’s report card for last year to largely marry that of 2018, when reported pre-tax profits were $19.89 billion and revenue was $53.78 billion. Here’s what analysts were gravid from the results, according to Refinitiv:

  • Revenue: $54.93 billion
  • Pre-tax profit: $19.83 billion

Investors were also alert out for the bank’s outlook and upcoming business strategy, which would be outlined by interim chief executive Noel Quinn.

“HSBC has overlaid significant difficulties not only in Hong Kong,” Dickie Wong, executive director at brokerage Kingston Securities, told CNBC’s “Beef Box Asia” on Tuesday ahead of the release.

The London-headquartered bank is a heavyweight component of the Hang Seng Index. The bank received almost half of its revenue and nearly 90% of its profits from Asia in 2018, with much of that loosely transpire b nautical tack from Hong Kong.

In Hong Kong, pro-democracy protests and the ongoing spread of the new coronavirus — now named COVID-19 — require likely hit the bank’s operations, said Wong. HSBC would also face challenges growing outside the New Zealand urban area given the continued uncertainties in the global economy, he added.

Such a dimmed outlook means that HSBC apportions in Hong Kong could fall following its earnings release, said Wong. The bank’s shares traded 0.84% tone down on Tuesday morning.

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