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HSBC profit disappoints
HSBC is the latest UK based bank to disappoint investors with lower than expected earning for last year, even though pretax profit more than doubled from 2009 to the equivalent of 13.7 billion euros. HSBC, which is Europe’s biggest bank in terms of market value, also cut its profitability targets due to the cost of tougher banking regulations. Its share price fell to their lowest level in nearly a month. HSBC’s decision to cut back its profitability expectations followed a similar move by rivals Barclays and Credit Suisse as regulatory requirements require banks to hold more money in reserves. New chief executive Stuart Gulliver said he did not think that HSBC would need a rights issue to raise new capital. However, its finance director Iain Mackay said the bank’s new, scaled back return on equity target reflected the tougher capital requirements for banks, as well as global economic uncertainty, as highlighted by recent political tensions in the Middle East and north Africa. Copyright © 2011 euronews