HSBC (2)

HSBC has seen its share price tumble more than 4% after announcing a surprise loss for the fourth quarter and warning over that impact the Chinese economy will have on its performance.

In the final quarter of 2015, the banking giant posted an unexpected loss of $1.3 billion, meaning its full-year profit grew just 1% to $18.9bn (£13.1bn).

With business in Asia accounting for more than 83% of HSBC's profits last year, investors were shaken by the bank's warning that it faces a "bumpier" 2016 as a result of the slowing economy in China.

Chairman Douglas Flint said: "China's slower economic growth will undoubtedly contribute to a bumpier financial environment."

However, Mr Flint stressed that the bank still expects China "to be the largest contributor to global growth as its economy transitions to higher added value manufacturing and services and becomes more consumer driven".

HSBC chief executvie Stuart Gulliver said 2015 had been difficult, but confirmed that the bank would press ahead with its cost-cutting measures.

He said: "Targeted investment, prudent lending and our diversified, universal banking business model helped us achieve revenue growth in a difficult market environment, whilst also reducing risk-weighted assets."

Investigation

HSBC also confirmed that it is the subject of an investigation by the US Securities and Exchange Commission (SEC) over its hiring practices in Asia.

The investigation concerns its hiring of people recommended by or related to government officials and employees of state-owned businesses.

HSBC said: "HSBC has received various requests for information and is cooperating with the SEC's investigation.

"Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant."