HSBC, Britain’s biggest bank, has recorded a 34% drop in profit for 2020 as it prepares to double down on its operations in Hong Kong and China despite concern about the political crackdown in the former UK colony.
The bank said on Tuesday that pre-tax profit was down from $13.3bn (£9.4bn) in 2019 to $8.8bn in the 12 months to 31 December, while the adjusted profit before tax of $12.1bn (£8.6bn) fell 76% on the year before.
The bank reported an adjusted revenue of $50.4bn (£35.8bn), representing a fall of just 8% on 2019, but its shares shot up 3.3% in early trading in Hong Kong following Tuesday’s announcement.
The bank announced a major executive reshuffle on Monday that saw its chief financial officer, Ewen Stevenson, assume responsibility for the group’s transformation programme and its mergers and acquisitions agenda.
In addition, Stephen Moss, who was head of strategy, will take on the role of chief executive for the Middle East, North Africa and Turkey and will relocate to Dubai from London in a signal of the bank’s intentions to focus on commercial opportunities in Asia.
More executive roles are expected to relocate to the bank’s historic home base of Hong Kong, according to reports, in a move that defies some Conservative party calls for British businesses to be more cautious about dealings with China.
Hong Kong is in the midst of an increasingly authoritarian crackdown pushed by the Chinese Communist leadership in Beijing, with several prominent opposition figures arrested and others banished.
But HSBC said its strategy for the future would include shifting capital to Asia, where it makes the majority of its earnings.
Last month the bank announced it would close 82 branches across the UK after the pandemic led to a greater shift to online banking, though it did say the closures were not entirely related to the lockdowns and restrictions introduced.
Group chief executive Noel Quinn, who is expected to map out more details on the bank’s strategy update and job losses later on Tuesday, said the company’s mandate in 2020 was to “provide stability in a highly unstable environment for our customers, communities and colleagues”.
He added: “I believe we achieved that in spite of the many challenges presented by the Covid-19 pandemic and heightened geopolitical uncertainty.
“Our people delivered an exceptional level of support for our customers in very tough circumstances, while our strong balance sheet and liquidity gave reassurance to those who rely on us.
“We achieved this while delivering a solid financial performance in the context of the pandemic – particularly in Asia – and laying firm foundations for our future growth.”