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HSBC profits plunge amid Brexit uncertainty

Profits at HSBC, Britain’s biggest bank, fell by 29 percent in the first half of 2016 amid concerns over the EU referendum and the state of China’s economy.

HSBC, a multinational business headquartered in London, is the world’s sixth biggest bank in terms of assets.

Its pre-tax profits fell to $9.7 billion (£7.2 billion), compared with $13.6 billion a year earlier.

 

220px-Douglas_Flint_-_World_Economic_Forum_Annual_Meeting_2012“It is evident that we are entering a period of heightened uncertainty where economics risks being overshadowed by political and geo-political events” – HSBC chairman

 

In Europe profits fell 27 percent to $1.6 billion, while in Asia – traditionally HSBC’s most profitable continent – profits dropped 23 percent to $7.2 billion.

Brexit turmoil

HSBC chairman Douglas Flint cited turmoil over the Brexit poll as a significant factor in the profit slump.

“Concern over the sustainable level of economic growth in China was the most significant feature of the first quarter and, as this moderated, uncertainty over the upcoming UK referendum on membership of the European Union intensified,” he said.

“It is evident that we are entering a period of heightened uncertainty where economics risks being overshadowed by political and geo-political events.”

New era

He urged British politicians to keep borders as open as possible for trade in the wake of the Brexit vote.

“We are entering a new era for the UK and UK business. The work to establish fresh terms of trade with our European and global partners will be complex and time-consuming,” he said.

“Critical elements include securing the best possible outcome on continuing terms of trade and market access, and ensuring the UK remains attractive for inward investment and has access to all the skills necessary to be fully competitive.”

He noted that much of HSBC’s traditional business has been based on financing trade in the past, making open relations with the EU and the rest of the world particularly important for the bank.

 

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