HSBC set aside £128m for Brexit costs

HSBC set aside £128m for Brexit costs

FTSE 100 bank HSBC has set aside $165m (£128m) as a contingency plan for Brexit, its latest set of accounts have revealed.

The bank posted a 5 per cent rise in revenue to $53.8bn (£41.7bn) and a 16 per cent rise in profits to $19.9bn (£15.4bn) for the 2018 calendar year, but both figures were worse than analysts had expected.

The bank said its revenue "collapsed" in December 2018 as global economic conditions deteriorated.   

The £127m provision comes despite only 10 per cent of HSBC’s revenue being generated in the UK.

Rival bank RBS set aside £100m for Brexit provision in its results out on Friday.

Ian Gordon, banks analyst at Investec, said: "The money is not for any specific definite event that has happened or is happening, but regulations require banks to make provision for different economic scenarios, and the way it was explained is that the range of possible economic outcomes on Brexit has widened during the past year, so the money must be kept."

HSBC did not go into details in the accounts about the reasons for the amount of money being set aside.

Mr Gordon said it was largely "a made up number" as it relates to no specific cost the bank faces right now, and each bank that has made this provision has chosen a different number.

The bank left its dividend unchanged at $0.51(£0.4) per ordinary share but the share price has fallen about 4 per cent this morning.