Costs and ROE target cast a shadow on HSBC's results

Despite declaring strong profit growth and a stellar year in global banking and markets, HSBC's share price fell yesterday as investors questioned the higher costs and a reduced return-on-equity target.

HSBC's net profit more than doubled in calendar 2010, but analysts are concerned by a large increase in costs and a lower return-on-equity forecast. Investors dumped the stock on the news, sending the share price almost 5% lower in London trading.

The 2010 earnings, which were released after the close of Hong Kong trading yesterday, showed a strong performance in calendar 2010. Profit before tax grew by $5 billion to $18.4 billion, which resulted...

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