Scandal-haunted HSBC sees profit slumps by 17 pct in 2014

HSBC Holdings plc, a Britain-based bank who is in trouble with tax evasion scandal, Monday announced that its reported profit before tax reached 18.68 billion U.S. dollars in 2014, down by 17 percent from the previous year.

HSBC said the primary reasons for the profit drop were lower business disposal and reclassification gains and the negative effect, on both revenue and costs, of significant items, settlements, UK customer redress and associated provisions.

Adjusted operating expenses of HSBC in 2014 were 37.854 billion dollars, increased by 6.1 percent from the previous year's 35.682 billion dollars, data showed. The bank said these were attributed to increased regulatory and compliance costs, inflationary pressures and investment in strategic initiative to support growth.

Earnings per share (EPS) and dividends per share for 2014 were 0.69 dollars and 0.50 dollars respectively, compared with 0.84 dollars and 0.49 dollars respectively for 2013, figures showed.

The group's Common equity Tier 1 ratio (CET 1), a gauge of financial stamina, slipped to 10.9 percent at the end of December 2014, down from the 11.3 percent at the end of June 2014, figures also showed.

Stuart Guilliver, Chief Executive of the group, said in a statement: "2014 was a challenging year in which we continued to work hard to improve business performance while managing the impact of a higher operating cost base."

"Many of the challenging aspects of the fourth quarter results were common to the industry as a whole," he added.

Earlier this month, International Consortium of Investigative Journalists, a Washington-based publication, reported details on how HSBC's Swiss unit handled accounts for tax evaders and criminals during the period from 2005 to 2007. Endit