HSBC continues operations, begins restructuring efforts in Turkey
by Daily Sabah with Wires
ISTANBULFeb 22, 2016 - 12:00 am GMT+3
by Daily Sabah with Wires
Feb 22, 2016 12:00 am
The international banking giant HSBC has decided to continued Turkish operations, after offers the bank received were deemed not in the best interest of shareholders, the group's CEO said on Monday.
"We have, therefore, decided to retain and restructure our Turkish operations, maintaining our wholesale banking business and refocusing our retail banking network," Stuart Gulliver said in a statement, as the bank released its annual earnings report. "This will provide better value for shareholders and continue allowing our clients to capitalize on HSBC's international footprint."
The bank reported on Monday that its pretax profit increased by 1 percent to $18.87 billion for 2015, compared with $18.7 billion for 2014. The bank's total revenue stood at $57.7 billion.
According to reports from July last year, the Dutch ING group was set to acquire HSBC Turkey. BNP Paribas and Bahrain-based Arab Banking Corp. were also reportedly bidding for HSBC's operations in Turkey.
HSBC warned of a "bumpier" global financial outlook thanks to China's slowing economy, and reported Monday that profits dipped slightly over the last year. Europe's biggest bank posted a net profit of $13.5 billion for 2015, down 1.2 percent from the year before and below the forecasts of analysts. The bank also unexpectedly announced a $1.3 billion loss for the final quarter, compared with a $511 million profit for the same period of the previous year.
Chairman Douglas Flint said the results were "broadly satisfactory." He said in a statement that last year was marked by, "seismic shifts in global economic conditions." These notably included the sharp decline in oil prices and other commodities, partly stemming from slowing growth in China.
The London-based bank has been steadily trimming back global operations as part of a sweeping reorganization announced last June, which directs focus to Asia, where it expects the region's growing affluence to drive profits. Asia accounted for 83.5 percent of HSBC's pre-tax profits last year. HSBC is slashing thousands of jobs and selling off businesses in countries like Brazil, while expanding in China – in particular, the wealthy Pearl River Delta manufacturing region in southern China.
Despite its focus on Asia, HSBC last month decided to keep its headquarters in London rather than moving to Hong Kong, ending a 10-month review prompted by new U.K. regulations and tax changes. The bank said keeping its base in London gave it the "best of both worlds." HSBC has a sizeable presence in Hong Kong, where it was founded to finance trade between China and Europe more than a century ago, when the city was still a British colony.