HSBC’s pre-tax profits fell 80% year on year in the final three months of 2023 as it took a $3 billion charge on the value of its stake in a Chinese bank and a further write down on commercial real estate, underlining how the country’s struggling economy is hitting lenders, reports the Financial Times.
Profits for the fourth quarter declined to $1 billion from $5 billion a year earlier, HSBC said on Wednesday. Its pre-tax profits for the full year rose 78% to $30 billion, as higher interest rates buoyed the lender, but missed analysts’ expectations of $34 billion.
HSBC said that the Bank of Communications impairment was “in line with recent market-wide developments in mainland China” but that BoCom “remains a strong partner.” The UK-based lender, which earns most of its profits in Asia and holds a 19% stake in the Chinese bank, said its “positive views on the medium- and long-term structural growth opportunities in mainland China are unchanged.”