BANKING giants HSBC have announced that profits have slumped by 82 per cent after a year of "unexpected economic and political events". Net interest income also declined to $29.81 billion from $32.53 billion a year ago.
HSBC follows many other banks in the region that have reported lacklustre earnings for the fourth quarter.
The retail banking and wealth management business was sluggish, as was private banking. The dramatic drop in the price of oil, which is down by half from its peak in the summer of 2014, has reduced the demand for loans and increased the level of debt defaults.
Last year, HSBC improved its internet and mobile banking platforms in several key markets, including the United Kingdom and Hong Kong.
Though analyst Tom Stevenson with Fidelity International believes its business elsewhere in Asia should compensate: "The concern with HSBC is possibly the slowdown in trade around the world, that's bad news for banking profitability but I think in the case of HSBC the intra-regional trade, particularly in Asia, could offset that; so the company said today that they were less concerned about the slowdown in trade".
In investment banking, growth in rates and foreign exchange trading helped to lift fourth-quarter and full-year revenues.
"We highlight the threat of populism impacting policy choices in upcoming European elections, possible protectionist measures from the new United States administration impacting global trade, uncertainties facing the UK and the EU as they enter Brexit negotiations", Flint said in his statement, which was filed to the Hong Kong stock exchange.
HSBC rival Standard Chartered last July named former deputy governor of the Bank of Spain Jose Vinals as its new chairman, ending a 16-month search that underscored the challenge of finding executives both palatable to regulators and capable of overseeing complex big banks.
The bank confirmed previous year it would keep its European headquarters in London, despite Britain's vote to leave the European Union. "Investor focus will be on HSBC's revenue outlook".
In all, profits fell to a mere US$2,48 billion (£1,99bn) down from US$13,52 billion (£10,9bn) a year prior.
The bank's share price tumbled 6.7%, and it topped the loser's board at midday on London's benchmark FTSE 100 index. Analysts had expected profits of $14.4bn, according to Thomson Reuters data.
Shares in Plumb Center owner Wolseley fell 18p to 4,997p, despite inking a deal that will see it expand further into Switzerland. Adjusted pretax profit from the global banking and markets division, which houses the investment bank, nearly doubled to $1.3bn.