HONG KONG, CHINA — Banking giant HSBC on Tuesday announced a dip in 2022 pre-tax profits last year, calling the ongoing impact of Covid-19 the main factor in its financial performance.

The Asia-focused lender said it made $17.5 billion before tax, down more than seven percent on-year, while reported revenue increased four percent to $51.7 billion.

In a statement to the Hong Kong stock exchange, HSBC detailed the tough global economic climate international banks are facing.

It cited renewed virus outbreaks in Hong Kong and mainland China as denting last year’s economic growth.

It added that global uncertainty sparked by Russia’s invasion of Ukraine, elevated inflation and rising interest rates contributed to a difficult financial environment that it expects will spill into 2023’s earnings and even eclipse the toll of the pandemic.

“We are already seeing… a cost of living crisis affecting many of our customers and colleagues,” Mark Tucker, the group’s chairman said in a statement.

However, after-tax profits rose $2 billion to $16.7 billion, while fourth-quarter pre-tax profit nearly doubled from $2.5 billion to $5.2 billion.

“All of our businesses grew profits in 2022, and we maintained our strong capital, funding and liquidity positions,” Tucker added.

The bank said last year reflected “a strong overall financial performance”, and announced a full-year dividend of $0.32 per share.

At an event last month, Tucker said China’s reopening and latest measures to stabilise its turbulent property market “will be positive for both its economy and the global economy”.

The lender has vowed to accelerate a multi-year pivot to Asia and the Middle East, and its ambitions to lead Asia’s wealth management market has shown early signs of success.

In November, the bank agreed to sell its Canadian division for $10.1 billion, saying it would use the funds to invest in its core business and return cash to investors.

The Canadian sale comes after a months-long campaign by HSBC’s biggest shareholder and Chinese insurance giant Ping An to cut costs and shift more resources to Asia.

Ping An has argued that spinning off HSBC’s Asian operations will unlock shareholder value amid tensions between China and Western powers, though the bank has rejected the move.

“It has been, and remains, our judgement that alternative structural options would not deliver increased value for shareholders,” Tucker said.

Chief executive Noel Quinn said the bank was focused on delivering a returns target of at least 12 percent for next year as well as keeping costs down.

“We are on track to deliver higher returns in 2023 and have built a platform for further value creation,” Quinn said.