Pre-tax profits at HSBC rose nine per cent in 2013 to 22.5bn dollars (consensus: 24.6bn dollars) as the company continued to slash costs and jobs in its drive to reduce operating expenses.
It also warned that it expects "greater volatility in 2014 and choppy markets as adjustments are made to changing economic circumstances and sentiment", especially in emerging markets, but said it remained optimistic about the longer-term prospects in this sector.
Chief Executive Stuart Gulliver, who was paid £8m for the year, up from £7.5m, said 2013 underlying operating expenses were down 6% at $38.2bn; but excluding notable items, operating expenses rose, partly reflecting inflationary pressures and a higher UK bank levy.
The higher UK levy cost HSBC $321m, taking the total levy for the year to $904m, of which $484m related to non-UK banking activity.
"The impact of the levy represented $0.05 per share which would otherwise have been available for distribution to shareholders or retained to strengthen the capital base or support incremental growth," the bank said.
Underlying revenues were $63.3bn, compared with 61.6bn last time, underpinned by a "resilient" performance in HSBC's global banking & markets division and growth in its commercial banking unit.
The bank said it had exceeded its cost cutting target for the end of 2013, making an extra $1.5bn in savings across all regions, taking the annualised total to $4.9bn since the start of 2011. The number of full-time staff was 254,000 at the end of the year from 295,000 at the start of 2011. It has shut down or closed 60 businesses in the same period.
Underlying pre-tax profits were up 41% in 2013 at $2.6bn. Earnings per share were $0.84 against $0.74 and the dividend was increased to $0.49, compared with $0.45 for 2012.
Return on equity came in 0.8% higher at 9.2%, compared with 8.4% in 2012. Gulliver said this was outside the bank's target range "in part affected by continuing UK customer redress". HSBC's core tier 1 capital was $149bn, for a ratio of 13.6%.
"Our performance in 2013 reflects the strategic measures we have taken over the past three years. Today the group is leaner and simpler than in 2011 with strong potential for growth," Gulliver said.
"We aim to deliver a further $2bn-$3bn of sustainable savings by streamlining our processes and procedures without in any way compromising our commitment to compliance and global standards. There remains considerable scope within the business to globalise and simplify many of our operations and practices."
"Our strong capital generation continues to support our progressive dividend policy and reinforces HSBC's status as one of the best capitalised banks in the world."
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