HSBC pre-tax profit more than double to $17.2bn

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( via – – Tue, 20 Feb 2018) London, Uk – –

Holdings’ pre-tax profit for 2017 has more than doubled to $17.2bn (£12.3bn), due largely to the absence of hefty restructuring costs, but the figure still lagged behind expectations as the bank took a writedown to take in US tax changes.

On the chief executive Stuart Gulliver’s last day in the job, Europe’s biggest lender by market capitalisation also announced plans to bolster its capital base by raising up to $7bn in the first half of 2018.

The pre-tax profit for 2017 compared with $7.1bn the year before but below the $19.7bn average estimate of 17 analysts polled by Thomson Reuters.

Those estimates did not all take into account the tax writedown, triggered by cuts in the US corporate tax rate that meant banks had to book losses on deferred tax assets built up during loss-making years.

HSBC said its 2017 financial results included a charge of $1.3bn relating to the “remeasurement of US deferred tax balances” to reflect the reduction in the US federal tax rate to 21% from 2018.

Banks including Credit Suisse and UBS have already reported multibillion-dollar writedowns from the tax change, while Barclays has said it expects a £1bn hit on its annual post-tax profit.

HSBC’s profit for 2016 reflected a $3.2bn impairment of goodwill in the global private banking business in Europe and the impact of its sale of operations in Brazil.

HSBC plans to boost its capital base with a $7bn fundraising.