HSBC reports 29% drop in profits during "turbulent period"

In the first half of the year, HSBC has reported a 29% decrease in overall profits.

The UK’s biggest bank revealed that pre-tax profit dropped to $9.7bn (£7.3bn) in the six months to June, which was down from $13.6bn (£10.2bn) for the same period last year.

The bank’s adjusted revenue of $27.7bn was also down by 4% compared to the first half of 2015.

As for the second quarter, HSBC saw pre-tax profits hit $3.1bn, which is down from $6.1bn for the previous three months.

Douglas Flint, HSBC group chairman, described the first six months of this year as a “turbulent period.”

He said: “The first half of 2016 was characterised by spikes of uncertainty which greatly impacted business and market confidence.

“This was reflected in lower volumes of customer activity and higher levels of market volatility. Concern over the sustainable level of economic growth in China was the most significant feature of the first quarter and, as this moderated, uncertainty over the upcoming UK referendum on membership of the European Union intensified.

“Demand for credit for investment slowed as a consequence. Equity market activity was also markedly lower, particularly in Hong Kong, reflecting both economic uncertainty and weaker market pricing, which was exacerbated by net selling from sovereign funds impacted by lower oil prices.

“The period ended with exceptional volatility as financial markets reacted to the UK referendum decision to leave the EU, a result that had not been anticipated.”

The bank also claimed it is set to return $2.5bn (£1.8bn) to shareholders, by way of a share buy-back during the second half of the year, following the sale of its business in Brazil.