HSBC (NYSE:HBC) released its earnings report for fiscal year 2012 early Monday morning, and despite a wide range of positive results, there was a significant showing of decline. For the year, Britain’s largest bank showed pre-tax profits of $20.65 billion and reported an underlying pre-tax profit of about $16.38 billion. Profits were down 6 percent from 2011, though up from 2010, and underlying profit was up 18 percent from the year earlier.
The profits came out of a total operating income of nearly $82.55 billion, which was down 1 percent from the year earlier. The bank’s profit took one of the more significant dives, dropping 17 percent from $16.22 billion in 2011 to $13.45 billion in 2012.
HSBC had a significant year, considering the various changes and legal struggles it went through. The bank had faced a record fine last year because it was charged for money laundering after being found to have handled billions of dollars in money transfers for countries that the U.S. had sanctions on. The fine was $1.92 billion.
Despite the U.S. being damaging to the bank in that regard, the U.S. and Asia proved beneficial for HSBC, as earnings for the year grew in those locations. Europe was the only area where HSBC’s earnings not only didn’t grow, but declined. Asia has been key for the bank, as half of its profit comes from there.
The bank plans to increase interim dividends by 11 percent, which comes on the heels of dividends per ordinary share that have increased straight through from $0.34 a share in 2010 to $0.41 in 2012. However, earnings per share for 2012 were down 20 percent to $0.74.
The bank also took up some major restructuring over recent years, with 46 businesses or investments sold or closed since 2011. Notable sales include that of its Ping An Insurance of China for $9.4 billion, and its credit card unit, which sold in the U.S. to Capital One Financial (NYSE:COF) for $2.6 billion and in Panama to Bancolombia (NYSE:CIB) for $2.1 billion just last month.
Now that the bank is leaner and seeing improvement in its business around most of the world, it may be able to reverse the downward slides it faced in 2012.
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