HSBC announces pre-tax profit of £13.7 billion for 2012

Press Release   •   Mar 04, 2013 11:06 GMT

HSBC has reported rising profitability and revenue in 2012, despite the cost of fines for money-laundering.

The bank announced a pre-tax profit of £13.7 billion for 2012, down 6% on the previous year. The figure was below City forecasts of around £15.6 billion.

Business rose strongly in Hong Kong and the rest of Asia, and the bank said it saw a sharp turnaround in Europe. Some 90% of the bank's earnings now come from outside the UK.

"HSBC made significant progress in 2012 despite a challenging operating environment characterised by low economic growth and a changing regulatory landscape," said chief executive Stuart Gulliver.

While acknowledging the bank's past anti-money-laundering and sanctions failings, he said the bank's performance had been strong enough to allow it to increase its dividend by 10%.

Last December the bank confirmed it would pay $1.92 billion (£1.2 billion) to settle a money-laundering probe by US authorities - the largest penalty of its kind ever paid by a bank.

The penalty related to financial transactions suspected of coming from Mexican drug cartels. At the time of the fine Mr Gulliver said his firm accepted responsibility for its past mistakes.

HSBC also set aside more money to cover the expected cost of past sins in the UK - a further $1.7 billion to cover the cost of mis-selling payment protection insurance (PPI) to mortgage borrowers, bringing the total provisioning for PPI claims to $2.4 billion, as well as $598 million for mis-selling interest rate swaps to small businesses.

Follow us on Twitter @CandMResearch issues news updates and report summaries covering all major industries and sectors. The service provides additional client monitoring and timely alerts to breaking industry and sector news leading the day's business headlines. News articles, written by our staff, contain additional analyst insight, providing value added insight for our readers. News updates and real-time alerts on newly-released market reports are also available from our Facebook page, Twitter feed @CandMResearch and RSS links. We also welcome inquiries from business journalists and the news media.