HSBC Missed The Earnings Forecast In Q4 2018

HSBC is one of the largest banks in Europe with reported earnings in billions every year. However, when the financial report was presented on Tuesday, it showed that HSBC had missed quite a few financial expectations for the year 2018, the turmoil in the global market during the 4th quarter being largely responsible for it.

The bank showed a pre-tax profit of around $19.89 billion which is a hike of 15.6%. However, according to the analysis done by Refinitiv, a renowned statistical company, the pre-tax profit should have been $21.26 billion for the complete year 2018. Moreover, the total revenue which stands at $53.78 billion was also expected to reach $54.674 billion, again a number forecasted by Refinitiv.

The company has announced that it will pay the dividends of all the shares for the full year at $0.51 per share but did not present any buy-back plans for shares, contrary to the expectations of such investors. The Hong-Kong sector of the bank lost around 2% of its evaluation as well.

Though HSBC had a torrid year like all other banks globally, the Chief Financial Officer, Ewen Stevenson, said that he found the performance quite pleasing, even though they had missed their mark by some margin. The fourth quarter has been harrowing for the market globally with many opting for sellouts which resulted in significant plummeting.

HSBC was able to weather the storm quite efficiently and still come out with a profitable year, which is satisfactory, considering the circumstances. Though the jaws ratio was negative by 1.2% in 2018, they will look to improve it again for 2019 and make it positive.

Stevenson also said that HSBC is prepared to face any backlash that it may face if Britain exits the European Union and already has a plan in place. He also remarked that despite the tension between China and the US regarding trade talks, the bank was not subjected to a huge slowdown. However, investors are going to be very cautious of the times to come as the major revenue of the bank is through the China and Hong Kong sector and any reduction in GDP here will be reflected in the financial situation of HSBC.

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Alice Martin

Having done MBA in Finance and with over one decade of experience in the field of business, Alice leaves no chance to use his expertise when it comes to Business section. She makes sure that Business news is up-to-date with correct numbers and figures. In her leisure time, Alice loves to play and watch movies with her two-year-old son.

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