Profit before tax at UK headquartered HSBC fell by 6% in 2012 to $20.6bn, from $21.8bn in 2011.
HSBC set aside $4.2bn in 2012 to cover its various fines and fees including $1.9bn in fines for money laundering and a further $2.3bn for mis-selling financial products in the UK.
HSBC profits in Europe were down by 27% in 2012 to $3.4bn.
Profits in the Asia-Pacific region were up by 36% to $18bn bringing profits in the Asia-Pacific to 87% of the banks total profits from 61% in 2011.
Revenue at the bank fell by 5% to $68bn, down from $72bn in 2011.
The cost efficiency ratio at the bank rose over seven percentage points to 62.8 from 57.5 in 2011, moving further from the bank’s target of 48-52%.
More positive results for the bank include:
– Underlying profit before tax $16.4bn, up 18% on 2011;
– Profits in retail banking and wealth management more than doubled in 2012 to $9.5bn up from 4.2bn in 2011;
– Loans and advances to customers at $998bn, up 6%;
– Deposits at the bank were up by 7% at $1.3tn, and
– Total assets at the bank grew to $2.7tn, up from $2.5tn in 2011.
Stuart Gulliver, group chief executive said: "HSBC made significant progress in 2012. First and foremost, we grew our business. We increased revenues, performed well in most faster-growing markets and enjoyed a record year in Commercial Banking.
"We’ve made the business easier to manage and control by disposing of non-core businesses and surpassed our sustainable savings target. We also agreed a settlement with the US and UK authorities in respect of our past anti-money laundering and sanctions failings.
"Based on our current understanding of the capital rules we are extremely well-placed with regard to Basel III compliance, re-establishing our position as one of the best capitalised banks in the world. This provides a firm base on which to keep growing the business organically and allows us to increase dividends to US$8.3bn."
Throughout 2012 HSBC has been committed to its plan to sell off its operations around the world in markets where it is less entrenched, including Russia, Pakistan, and Costa Rica.
HSBC said it is targeting a reduction in costs by fine-tuning its retail banking business efforts to profitable markets.
RBS, NatWest and HSBC to refund forgotten cash
HSBC sells its operations in Costa Rica, El Salvador and Honduras
HSBC and first direct customers to get account access at post office branches