Shares in Britain's biggest bank fell by 4 per cent in early trading to 729½p as investors weighed up the results, which mark the swansong of Stuart Gulliver, who is stepping down as chief executive after eight years. But now, coupled with a more benign market environment, the overhaul is starting to pay off.
But analysts said that although HSBC had bounced back after restructuring and a string of financial scandals, it missed some profit forecasts with margins looking comparatively good in 2017 because of specific one-off losses the previous year, including the sale of the bank's Brazil business.
HSBC today announced a pre-tax profit of 17.2 billion Dollars in 2017, compared to 7.1 billion USD an year earlier. Similarly, the lack of further share buybacks - for the moment hampered by the bank's efforts to shore up capital further - were the source of some disappointment, as was a slightly softer fourth quarter.
Those estimates did not all take into account a US$1.3 billion writedown for 2017 that HSBC took, triggered by cuts in the United States corporate tax rate which meant banks had to book losses on deferred tax assets they built up during loss-making times.
FILE PHOTO: HSBC bank signage is seen on a bank branch in Valletta, Malta, September 5, 2017.
Tuesday's surge in reported pre-tax profit was a 141 percent rise on the $7.1 billion it posted in 2016.
Stuart Gulliver withdrew from office today after more than seven years at the helm of HSBC Holdings and will be replaced by a veteran John Flint.
Adjusted profit before tax was $21 billion, compared to $18.93 billion lat year, as revenue growth and lower LICs more than offset higher adjusted operating expenses.
That could include the results of a review into HSBC's underperforming USA business which has long suffered from a lack of scale and the after-effects of the bank's disastrous acquisition of Household International in 2003. "After the most extensive transformation programme in HSBC's 153-year history, HSBC is simpler, stronger and more secure than it was in 2011, and better able to connect customers to opportunities in the world's fastest growing regions".
Adjusted loan impairment charges fell to $1.8bn from $2.6bn, mainly due to the healthier state of the oil and gas industry in North America.
The two companies responsible were Steinhoff International Holdings NV - the South African retailer engulfed in an accounting scandal and Carillion Plc, the United Kingdom construction company that imploded earlier early this year, a person familiar with the figures said, who asked not to be identified speaking about confidential data.
"I am working with the management team and the board to evolve our strategy and execute it at pace, and I will update shareholders on this work by our half-year results", he added.
HSBC, Europe's largest bank, has been focusing on a drive to streamline its business and slash costs.
"We are doing a piece of work around the USA business at the moment, I don't want to prejudge any conclusions", Flint said.