HSBC reports 1% rise in pre-tax full-year profit to almost $19bn

"HSBC is better balanced, better connected and better placed to capitalize on higher return businesses than it was 12 months ago," the bank said Monday.

"All of our initiatives to reduce costs are underway and we expect further progress in 2016," the bank said on Monday. It expects to deliver further reductions in risk-weighted assets this year, in addition to a decrease of around USD 33 billion from the sale of its Brazilian business.

Full-year earnings per share and dividends per ordinary share were USD 0.65 and USD 0.51, respectively.

But analysts are worried the bank may be unable to maintain such payouts as it undergoes a strategic re-balancing program. Last year, HSBC said it aims to increase revenues by moving a major chunk of its assets to higher growth markets, namely Asia, and cut USD 5 billion in costs by 2017.

Increasing costs, a bank levy and a lack of growth are all factors that could make it unlikely for HSBC to sustain yields at current levels, explained Dickie Wong, executive director of Kingston Securities.

While HSBC is in a better shape than peer Standard Chartered after implementing structural changes, there isn't much upside for the stock, Wong added.

A slew of headlines surrounding the bank's remuneration policy in recent weeks suggest the bank isn't wasting any time in achieving its targets.

Over the weekend, the Financial Times reported HSBC will decrease pension payments for top executives, making them equivalent to 30 percent of salaries, from 50 percent previously, following shareholder complaints.That will cut chief executive officer (CEO) Stuart Gulliver's allowance from 625,000 pounds (USD 892,906) previously to 375,000 pounds.

However, it has faced pushbacks on other fronts. HSBC said earlier this month that it would not freeze 2016 pay for global employees following staff protests.

A 10-month long debate about the location of its headquarters could have also impacted the bank's fourth-quarter performance. Earlier this month, it was announced HSBC's home will remain in London, despite the region's hefty bank tax that had incited speculation of a move to Hong Kong.

Now, the bank has its attention focused on an orderly succession planning. Chairman Douglas Flint and CEO Gulliver are both expected to step down within the next two years and HSBC has said the next chairman could be an external candidate.

With China playing a leading role in the bank's 'pivot to Asia,' stumbling growth on the mainland is yet another headwind for HSBC. The world's second-largest economy is moving at its slowest pace in two decades and concerns about the management of both its economy and financial markets have hurt investor sentiment in recent months.

The bank did acknowledge on Monday that China's slowing economic growth risk creating headwindsu, but ultimately, it doesn't believe in a hard landing ahead.

"China retains the fiscal and monetary tools to cushion the impact in the short-term. Further easing measures and the relaxation of controls on spending will certainly help", Flint said earlier this month, according to media reports.

Overall, the risks clouding HSBC and Europe's overall banking sector are set to continue hurting revenue growth.

The region's banking shares were at the center of global market turmoil at the beginning of the year amid an environment of low interest rates, worsening credit quality and rising non-performing loans (NPLs).

Still, the probability of these concerns morphing into a full-blown financial crisis is substantially lower than previous years thanks to easy access to funding and emergency back stop provisions, according to Jernej Omahen, head of European Financials Research at Goldman Sachs.

For now, profits of global financials will remain under pressure as long as interest rates in developed markets, such as Europe and Japan, stay low, Andrew Freris, CEO of advisory service Ecognosis Advisory, told CNBC on Monday.