HONG KONG: HSBC posted on Wednesday tumbling second-quarter net profit on volatile markets and China’s slowdown, warning it faced “a period of heightened uncertainty” after Britain voted to leave the European Union. Earnings after tax sank 40 percent to $2.61 billion in the three months to June from a year earlier, the firm said in a results statement, but assured it had weathered the Brexit storm “securely” after the nation’s shock vote to exit the EU in the June 23 referendum. Pre-tax profit dived 45 percent at $3.61 billion over the same period, missing forecasts of $3.9 billion according to Bloomberg News. “Concern over the sustainable level of economic growth in China was the most significant feature of the first quarter and, as this moderated, uncertainty over the upcoming UK referendum on membership of the European Union intensified,” said chairman Douglas Flint. The firm’s share price rallied however after it announced a share buy-back of up to $2.5 billion for the second half of 2016, in a move funded by the sale of its Brazil business. The lender added that annual shareholder dividend payouts would be protected “for the foreseeable future”. However, Flint said UK business was now entering a new era as Britain negotiates its departure from the EU under new Prime Minister Theresa May. “It is evident that we are entering a period of heightened uncertainty where economic risks are being overshadowed by political and geo-political events,” Flint said. The approval of the referendum has raised fears about the long-term impact on the world economy, with warnings that Britain — one of the world’s biggest financial hubs — could slip into recession in the current quarter. Flint added that establishing fresh terms of trade with EU and global partners would be “complex and time-consuming”. The fallout would require the bank to re-position in Europe, Flint said. “Re-positioning our own European business once the future of the UK’s current ‘passporting’ arrangements for financial services is clarified in the upcoming negotiations will add to the very heavy workload already in place,” he added. Chief executive Stuart Gulliver predicted tough times ahead, saying volatility is “likely to continue for some time”. He added in a conference call that British banks would take a wait-and-see approach to Brexit. “I think that most banks, certainly HSBC, will take a pretty measured approach to this to see how matters evolve over the next couple of years,” Gulliver told reporters when asked about the impact on the sector. HSBC added Wednesday that pre-tax profits in the six months to June dived 29 percent year-on-year to $9.7 billion. Net profit for the same period fell 28 percent year-on-year to $6.91 billion, and half-year revenues also slipped 4.5 percent to $27.87 billion. The bank saw loan impairment charges soar 85 percent to $2.37 billion in the first half of 2016, attributing the rise to charges in the oil, gas and mining sectors. Flint said the company had removed a target to achieve a 10 percent return on equity – a measure of a firm’s profitability — from its agenda due to uncertainties and projections for an extended period of low interest rates. HSBC last year announced a radical overhaul to cut costs that included shedding 50,000 jobs worldwide, exiting unprofitable businesses and focusing more on Asia. The bank said Wednesday that its operating expenses were down since the cost-cutting drive — they had been reduced by four percent to $15.9 billion in the first half. It also said it would stick to its Asia-focused strategy, with southern China’s Pearl River Delta a priority area. “Nothing that has happened in this turbulent period casts doubt on the strategic direction and priorities we laid out just over a year ago,” said Flint.