Shares in HSBC slid by more than six percent after the company reported that revenues had fallen by one fifth from 2015 levels, highlighting the difficulties it was having in the global environment with low interest rates and slowing economic growth.
Europeís biggest bank, by assets, generated profits of $7.1 billion in 2016, compared to $18.87 billion in the previous year, far lower than the $14.4 billion that most analysts were expecting.
The banks also announced a new $1 billion share buy-back, as a part of its ongoing plan to return cash to shareholders following the sale of its Brazilian business. Itís core capital ratio is currently 14.6 percent, which is lower than expected, and it is likely that these disappointing overall results might drive down forecasts for the stock.
The bank has signalled a number of factors that are putting pressure on its revenues for 2017, with lower interest rates, unfavourable foreign exchange rates and an increase in regulatory capital costs all weighing on their performance. Those factors have combined to create a situation where the bank is likely to suffer a significant consensus downgrade, with further losses to come over the next few days, and likely struggles for other major players in the financial sector, many of whom are also facing regulatory pressures or issues related to past lending.