HSBC’s 2017 pre-tax profit jumps 142%, but lags forecast due to US tax impact

The bank’s year-ago profit figure reflected a $3.2 billion impairment of goodwill in HSBC’s global private banking business in Europe and the impact of its sale of operations in Brazil. (Reuters)
Updated 20 February 2018
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HSBC’s 2017 pre-tax profit jumps 142%, but lags forecast due to US tax impact

HONG KONG: HSBC Holdings’ 2017 pre-tax profit rose 142 percent as the lender avoided the multi-billion dollar restructuring costs that marred its 2016 results but the profit growth lagged expectations as it took a writedown following US tax changes.
Europe’s biggest bank by market capitalization reported on Tuesday a profit before tax for 2017 of $17.2 billion, compared with $7.1 billion the year before and below the average estimate of $19.7 billion, according to Thomson Reuters data based on forecasts from 17 analysts.
Those estimates did not all take into account the tax writedown, triggered by cuts in the US corporate tax rate which meant banks had to book losses on deferred tax assets they built up during loss-making times.
HSBC said in its earnings statement that its 2017 financial results include a charge of $1.3 billion relating to the “remeasurement of US deferred tax balances” to reflect the reduction in the US federal tax rate to 21 percent from 2018.
The bank’s year-ago profit figure reflected a $3.2 billion impairment of goodwill in HSBC’s global private banking business in Europe and the impact of its sale of operations in Brazil.
HSBC’s reported revenues rose to $51.4 billion from $48 billion a year ago.


Adnoc signs deal with Eni on Ghasha concession

Updated 13 November 2018
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Adnoc signs deal with Eni on Ghasha concession

  • ADNOC grants Eni 25 percent stake in ultra sour gas project
  • Follows Adnoc award to France's Total

LONDON: The Abu Dhabi National Oil Company (ADNOC) has granted the Italian oil company Eni a 25 percent stake in an off-shore gas mega-project, in a move that will support the emirate’s efforts to become self-sufficient in gas.
The energy company is now in discussions with other potential partners for the remaining 15 percent of the available 40 percent stake in the concession earmarked for foreign companies.
The award covers the Ghasha ultra-sour gas concession just off the coast of the UAE, including the Hail and Dalma and other offshore fields. Eni will contribute 25 percent of the development cost of the project which is likely to cost billions of dollars.
The deal comes just days after ADNOC awarded a 40 percent stake to French oil firm Total on Nov. 11 to explore and develop its Ruwais Diyab unconventional gas concession.
The Ghasha gas fields are estimated to hold trillions of standard cubic feet of recoverable gas, according to a company statement.
Once on stream, the project is expected to produce more than 1.5 billion cubic feet of gas per day. This could provide enough gas to supply electricity to more than 2 million homes, said ADNOC.
The project is set to produce 120,000 barrels of oil and high-value condensate per day once complete, the company said.
“ADNOC is committed to ensuring a stable and economic gas supply to the UAE, which is a core component of our 2030 strategy,” said Sultan Ahmed Al-Jaber, UAE minister of state and ADNOC group CEO.
“Development of our Hail, Ghasha and Dalma ultra-sour gas offshore resources, at commercial rates, will make a significant contribution towards delivering that strategic imperative and bringing forward the day when the UAE will not only be self-sufficient in gas but also transitions to net exporter of gas,” he said.
Eni won its first concession rights in the emirate’s oil and gas sector earlier this year, with Adnoc granting the Italian firm a 10 percent interest in its Umm Shaif and Nasr concession and a 5 percent stake in the Lower Zakum concession in March.
“We are pursuing a strategy of growing in the Middle East and today’s signature is further confirmation of our willingness to root our presence in Abu Dhabi,
following the agreements signed last March, with Adnoc,” said Eni CEO, Claudio Descalzi, in a statement.
ADNOC is exploring opportunities beyond Abu Dhabi, having also signed a framework agreement with the Uzbek energy company, Uzbekneftegaz on Tuesday.
The agreement will see the Gulf company provide advice on Uzbekistan’s upstream and downstream operations.