HSBC’s fortune likely turned around in 2017, with analysts projecting a slight increase in the bank’s profit for that year thanks largely to rising interest rates.
The bank, the largest in Europe by assets, is expected to post full-year pre-tax profit of around $19.59 billion after adjusting for one-off events, according to a Reuters estimate.
That’s 1.5 percent higher than the same measure one year ago in 2016, and reversing the 1.2 percent year-on-year decline previously seen. The expected improvement was a result of higher interest rates, which help to boost the bank’s lending profitability.
HSBC is due to release its fourth-quarter and full-year report card at 12 noon HK/SIN Tuesday.
“I think they will have another, not a record, but better-than-expected earnings,” Dickie Wong, executive director of Kingston Securities, told CNBC ahead of the release of the financial report.
The bank’s Hong Kong-listed shares, a heavyweight on the Hang Seng Index, traded 1.26 percent higher at 11 a.m. HK/SIN.
Wong added that HSBC is “in a better shape” compared to other international banks, and investors would be looking for another round of share purchases, though not at the levels previously seen. The bank has bought back $5.5 billion worth of shares from investors since August 2016.
HSBC’s latest earnings statement would cement its ability to pick itself up after the global financial crisis. In addition to shifting its focus to Asia, the bank also scaled back some of its operations, including selling its Brazilian business.
Stuart Gulliver, instrumental in that turnaround, will step down as the bank’s chief executive after Tuesday. He will be replaced by HSBC veteran John Flint, who most recently served as the bank’s head of retail banking and wealth management.
