HSBC shares fall after the announcement of a huge dip in profits
Brexit and Trump blamed as annual profits plunge by 62%
by Abi Moses on 21st February, 2017 and updated 21st February, 2017 10:22am
It has been suggested that over the coming week the global political landscape will have a major impact on stock markets and currencies.
That certainly rings true for HSBC. The banking giants have today reported a 62% fall in profits, with Brexit, Trump and uncertainties surrounding several European countries all being attributed to the slump.
HSBC has previously confirmed that Britain's decision to leave the EU meant it "may need to relocate some 1,000 roles from London to Paris progressively over the next two years, depending on how negotiations develop."
That plan could now hinge on the outcome of the French presidential campaign. If the National Front's Marine Le Pen were to take office, France would be set to leave the eurozone and it is likely that they would also leave the European Union. Where then for HSBC?
It is believed that if France were to trigger a 'Frexit' vote, it would have a huge impact on global markets, even more than the UK's EU departure.
HSBC shares were 6% lower in early trading in London, with the announcement that pre-tax profits for 2016 were down to £5.7bn, compared to £15.2bn a year earlier.
Chairman Douglas Flint said, "2016 will long be remembered for its significant and largely unexpected economic and political events. The uncertainties created by such changes temporarily influenced investment activity and contributed to volatile financial market conditions."
In a more positive move, the banking giants have upgrading its economic growth forecasts, reflecting the improving economic performances of both the US and China economies.
It's no secret that HSBC, like many other major banks and corporations are suffering due to the increasingly weak Pound. A resurgence in the British currency would be welcomed by many FTSE companies. Whether you feel the Pound is capable of improving or if you believe the slump will continue, you can trade all major currencies with any of Spread Betting's partner brokers.
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