HONG KONG (AP) — HSBC said Tuesday that profits rose on strong earnings from Asia, in the latest sign that the London-based global bank’s restructuring to focus even more on the region is paying off.
The bank said pretax profit, after adjusting for one-off items and currency fluctuations, increased 11 percent to $21 billion in 2017, as adjusted revenue climbed 5 percent to $51.5 billion.
Net income more than quadrupled to $10.8 billion.
“Asia again contributed a substantial proportion of the group’s profits,” the company’s chairman, Mark Tucker, said in a statement.
The bank is Europe’s biggest but Asia accounted for nearly nine-tenths of total profits last year, when HSBC completed a sweeping multiyear corporate revamp to raise profitability.
The overhaul included laying off thousands of workers, bringing in new leadership and selling off its businesses around the globe to focus on emerging markets in Asia.
HSBC is focusing in particular on Hong Kong and the affluent Pearl River Delta region in neighboring mainland China.
Tucker, an outsider who took over as chairman in October, said the bank forecast “reasonable growth” for the world’s major economies in 2018, aided by low unemployment, recovering consumer confidence and improving trade.
“Fears of a hard (economic) landing in China have receded, and markets across Asia look set for a strong year,” Tucker said. He added that the expected signing of regional trade agreements in 2018, mostly involving Asian nations, “also provides cause for optimism” while the Belt and Road Initiative, China’s massive infrastructure program, provided new business opportunities.
But rising international tensions and the threat of protectionism are among the risks that “have the potential to disrupt economic activity,” he said.
A new chief executive, company veteran John Flint, is set to take over Wednesday from Stuart Gulliver, who is retiring after seven years at the helm.
In December, HSBC passed a key milestone when a five-year deferred prosecution agreement with the U.S. Department of Justice expired. It was an important step for the bank, allowing it to avoid charges for a money laundering scandal involving Mexican drug barons and countries facing U.S. sanctions.