HSBC profits disappoint as bank warns US-China trade war will hurt business in 2019

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails

Sign up to our free breaking news emails

Please enter a valid email address

Please enter a valid email address

SIGN UP

I would like to be emailed about offers, events and updates from The Independent. Read our privacy notice

HSBC reported disappointing profit for 2018, and warned that economic slowdown in China and the UK would hit the business this year.

The bank posted pre-tax profit of $19.9bn (£15.4bn) for the year, up 16 per cent on the previous year, but a smaller increase than expected, due in large part to the difficult trading environment in the final quarter of 2018.

The lender the bank may have to scale back investment plans in order to avoid missing a key target known as ‘positive jaws’ - which tracks whether it is growing revenues faster than costs - for a second straight year.

Chief executive John Flint said HSBC remained alert to the downside risks of the current economic environment, global trade tensions and the future path of interest rates.

“We will be proactive in managing costs and investment to meet the risks to revenue growth where necessary, but we will not take short-term decisions that harm the long-term interests of the business,” he said.

Mr Flint added: “These are good results that demonstrate progress against the plan that I outlined in June 2018. Profits and revenue were both up despite a challenging fourth quarter, and our return on tangible equity is significantly higher than in 2017.”

Shares in HSBC dropped 2.9 per cent in early trading.

Steve Clayton, fund manager at Hargreaves Lansdown, said: “HSBC has always been a bank built around facilitating international trade between Asia and the rest of the world. Today’s tariff spats between the US and China are hardly helpful and could begin to hurt the group’s customers in Asia and beyond.

“It is disappointing to see the group’s performance so impacted by short term market conditions, highlighting the need to see the bank continue to focus on pivoting toward Asia and growing its less volatile retail and commercial banking activities.”

Additional reporting by newswires