The bank’s exposure to China hurts its bottom line and causes investor concerns about the future, which causes Hong Kong shares to plummet.
The largest lender in Europe, based in the UK but primarily serving Asia, announced pre-tax earnings for 2023 of $30.3 billion (£24 billion), a 78% increase over 2022’s total.
Even while rising rates are mostly to blame for this, which is a result of central banks taking action to combat inflation, which peaked during the year, HSBC said that it was apprehensive about the forecast for loan growth in the first half of 2024.
Although that may be somewhat explained by the increased interest rates in Europe, HSBC is also highly vulnerable to issues in the second-biggest economy in the world.
Although the delayed relaxation of COVID limitations initially helped China bounce back, a debt crisis in the real estate industry has affected investment and expenditure more broadly.
The weakening of the global economy has also resulted in a significant decline in demand for its manufacturing sector, which is its main source of strength.
