HSBC’s profits slump by 29% as bosses predict tough times ahead but say they have weathered Brexit storm
Britain's biggest bank says it is making progress in all areas within its control
HSBC has announced a 29% drop in profits amid a “turbulent period” for Britain’s biggest bank.
It said it was heading into "a period of heightened uncertainty" after the country voted to leave the European Union.
Pre-tax profits at the bank were down by £2.9billion for the first six months of the year, to £7.2billion.
But despite this, the bosses say they have weathered the Brexit storm securely.
Group chairman Douglas Flint said the business is now entering a new era as Britain negotiates its departure from the EU.
He added: "It is evident that we are entering a period of heightened uncertainty where economic risks are being overshadowed by political and geo-political events.”
Mr Flint warned negotiating Brexit and new global trade deals would be complex and time-consuming for the UK and UK businesses.
And the group chief executive Stuart Gulliver predicted tough times ahead, saying volatility is "likely to continue for some time".
“While economic conditions remain difficult, we are making progress in all of the areas within our control.
“In the meantime, our balanced business model, strong liquidity and strict cost management make us highly resilient,” Mr Gulliver added.
In Asia – which is usually HSBC’s most profitable continent – profits dropped 23% to £5.4billion.
Mr Flint said: “Concern over the sustainable level of economic growth in China was the most significant feature of the first quarter and, as this moderated, uncertainty over the upcoming UK referendum on membership of the European Union intensified.
"It is evident that we are entering a period of heightened uncertainty where economics risks being overshadowed by political and geo-political events."
As it announced the slump in profits it also admitted it has breached an American watchdog’s order to step up its defences against financial crime.
Back in October 2010 the US Office of the Comptroller of the Currency said it had to “establish an effective compliance risk management programme across HSBC’s US businesses”.
The Guardian reports the bank said: “HSBC Bank USA is not currently in compliance with the OCC order.
“Steps are being taken to address the requirements of the orders.”