So HSBC have announced a reduction in profits of 29% for the first half to £7.2Bn. How will the markets react ? Should they be concerned ? Should we have expected to see things be a little less stable while the Brexit decision sank in and the world got used to what was about to happen ?
I don’t expect to see profits rising year on year, for any business, – it’s not a sustainable position and in fact I’d ask more questions about how that is being achieved if it’s happening year in, year out. We’ve all seen various business lifecycle graphs, and by anyone’s standards HSBC is a mature business, well established in the market with a good reputation. It undertakes its business in an arena that is dominated by a few big names in the UK and to be honest, they are all much of a muchness. Pricing might be a little different, offers might pop up here and there, but by and large in a domestic scenario we put our money in, we take our money out by various methods and hopefully there’s still a bit left before the next lot goes in. It’s the same for most of the small businesses around the UK too.
£7.2Bn is a creditable performance in a competitive market with all sorts of challenger banks and second tier lenders nibbling away and the pie of which HSBC has a significant share. The world is, however, a bit bonkers. The markets expected HSBC profits to be down and so when the results were announced and profits were down, the market thought it had performed as expected and the share price went up 4%. Make of that what you will, but I’m happy to see HSBC still producing sensible results in a competitive market.