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HSBC in 62% profit slump after 'unexpected' world events

The company blamed the drop in profits on unexpected world events in 2016. Credit: Joe Giddens / PA Wire

HSBC has announced that annual profits have slumped by 62% after a year of "unexpected economic and political events".

The London-based lender, which is Europe's largest bank, posted worse-than-expected pre-tax profits of £5.7 billion, down sharply on the £15.2 billion for 2015.

HSBC blamed a string of one-off charges, such as the sale of its Brazilian operations, as well as hefty write-downs from a restructuring.

Douglas Flint, the group's chairman, insisted the group's performance was "broadly satisfactory" in the face of "volatile market conditions" caused by Brexit negotiations as well as Mr Trump's US presidency.

The group chairman warned further political developments within Europe and the US could have further impact. Credit: PA

He said: "2016 will be long remembered for its significant and largely unexpected economic and political events.

"These foreshadowed changes to the established geopolitical and economic relationships that have defined interactions within developed economies and between them and the rest of the world."

Mr Flint also warned about the "threat of populism" for the year ahead and risks from "upcoming European elections, possible protectionist measures from the new US administration" that could impact on global trade.

He added other risks that could impact on the company include: "uncertainties facing the UK and the EU as they enter Brexit negotiations, and the impact of a stronger dollar on emerging economies with high debt levels".

He also reiterated 1,000 jobs may have to move from London to Paris over the next two years depending on the outcome of Brexit negotiations.