HSBC warned of a “bumpier” global financial outlook thanks to China’s slowing economy, as it reported a fall in profit last year.
Europe’s biggest bank posted pre-tax profits of $18.9bn (£13.2 billion) for 2015, up 1pc on the previous year. However, adjusted profits, which are an industry measure of underlying growth, slumped 7pc to $20.4bn.
The bank, which this month revealed it will keep its headquarters in London, also unexpectedly announced a $1.3bn loss for the final quarter, compared with a $511m profit in the same period the previous year.
It also revealed in a footnote in the results that it was being investigated by the US Securities and Exchange Commission in relation to hiring practices of candidates with ties to government officials in Asia.
“HSBC has received various requests for information and is cooperating with the SEC’s investigation,” the bank said.
“Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant.”
Chairman Douglas Flint said the results were “broadly satisfactory.” He said that last year was marked by “seismic shifts in global economic conditions,” notably sharp falls in prices for oil and other commodities, partly stemming from slowing growth in China.
The London-based bank has been steadily trimming back its global operations as part of a sweeping reorganisation announced last June in order to focus on Asia, where it expects the region’s growing affluence to drive profits.
It’s slashing thousands of jobs and selling off businesses in countries like Brazil while expanding in China, particularly the wealthy Pearl River Delta manufacturing region in the country’s south.
HSBC said that cost cutting measures were already having an impact and it’s now a “leaner business” than it was half a year ago.
However, Mr Flint warned of challenges from the China’s slowdown.
“China’s slower economic growth will undoubtedly contribute to a bumpier financial environment, but it is still expected to be the largest contributor to global growth as its economy transitions to higher added value manufacturing and services and becomes more consumer driven,” he said.
Economic growth in China, the world’s second biggest economy, dipped to a 25-year low of 6.9pc last year. Officials are forecasting growth of between 6.5 to 7pc this year.
There have been a string of developments at the bank this year, including hints by chief executive Stuart Gulliver that he may step down in two years’ time.
After a lengthy review HSBC also announced this month that it will keep its headquarters in the UK, although the good news was tempered soon after by a warning that the bank would move about 1,000 jobs from London to Paris in the event of Britain leaving the EU.