Profits came in some $12bn higher than in 2009, which was accounted for almost entirely by a fall in bad debt losses - from $26bn to $14bn. That's a pretty big improvement, although the $19bn total fell short of the $20bn analysts were expecting - hence the 4.5% drop in its share price today. It's also doing its bit in the UK, boosting business lending to nearly £40bn (including £2.4bn to SMEs) and contributing $383m worth of corporation tax to the Treasury coffers (as part of a $4.8bn global tax bill).
As well as the lower-than-forecast profits, investors were disappointed by HSBC's decision to reduce its long-term return on equity target to 12-15%, from 15-20%. You can see why that would go down badly; but as the bank said, it's an inevitable consequence of the higher capital requirements forced on the banks by governments, and the general economic doom and gloom. HSBC has always had one of the strongest capital ratios around – it’s now a healthy 10.5% - but lower returns are an inevitable consequence of forcing the banks to take fewer risks. So this is hardly a big surprise.
As usual, there's been lots of sound and fury about bonuses. New CEO Stuart Gulliver is set to receive £6.2m for last year's work, including a £5.2m bonus. It’s a lot of money – but since it will all be paid in deferred shares, and since it's hardly a lot by international standards for a man running one of the world's biggest companies, it's a bit hard to see what the fuss is all about.
Still, that's the political environment HSBC is operating in these days. Chairman Douglas Flint warned of the consequences of this today, complaining about the bank levy applying not just to its UK businesses but some of its overseas operations too - meaning that it's making the UK a less attractive place to base a big bank. As an employer of more than 50,000 people in the UK, it wouldn't really be ideal if it chose to shift its HQ to Hong Kong...