* FY pretax $18.87 bln vs f'cast $21.8 bln after $858 mln Q4loss
* Says under SEC investigation over recruitment practices inAsia
* Raises annual dividend to $0.51 per share from $0.50
* CEO Gulliver pay lowered to 7.34 mln stg from 7.62 mln
* Shares in London down 3.7 percent (Removes extraneous text from headline; adds detail ofinvestigation on China hiring practices, Brexit debate, analystcomment)
By Lisa Jucca
HONG KONG Feb 22 (Reuters) - HSBC is underinvestigation by U.S. regulators in relation to hiring practicesof people tied to government officials in Asia, the bank said onMonday, as it warned of an uncertain environment particularly intop market China.
Europe's biggest lender said profit before tax was $18.87billion for 2015, little changed on the year before and wellbelow an average analysts' estimate of $21.8 billion, accordingto Thomson Reuters data, dragged down by an unexpected $858million loss in the fourth quarter.
The bank also confirmed being among a number of financialinstitutions under investigation by the U.S. Securities andExchange Commission (SEC) over recruitment practices in Asia.
In a footnote to its earnings statement it said it couldn'tpredict how or when the matter would be resolved but said theimpact "could be significant".
The SEC had opened a probe into JPMorgan in 2013regarding the hiring of "princelings", the term used in Asia torefer to the children or younger relatives of China's politicalleaders or of powerful executives at state-owned enterprises.
HSBC said it would stick to delivering on a June strategicplan centred around expanding in China, in particular thedensely-populated Pearl River Delta region. But Chairman DouglasFlint added the economic slowdown there was making theenvironment more challenging.
"China's slower economic growth will undoubtedly contributeto a bumpier financial environment, but it is still expected tobe the largest contributor to global growth as its economytransitions to higher added-value manufacturing and services andbecomes more consumer driven," Flint said.
MUTED OUTLOOK
The bank said its poor fourth-quarter results reflectedvalue adjustments on derivatives, legal costs and the disposalof its Brazilian business. The figures were also hit byrestructuring costs the bank is undertaking to achieve costsavings of between $4.5 billion and $5 billion.
HSBC said it would retain Turkish operations that had beenup for sale, after offers it received were deemed not to be inthe best interest of shareholders. It will instead restructurethe unit.
HSBC was the biggest-declining stock in the blue-chip FTSE100 index early Monday, down 3.7 percent at 433 pence by0815 GMT.
"It remains a very good bank with a conservative riskappetite and will continue to outperform peers in a bear market,but as we've seen today, the earnings outlook for the bankremains muted," analysts at Bernstein Research wrote in a note.
Last year, Asia represented 83.5 percent of global pretaxprofit for HSBC, a larger portion than a year earlier and a signthe bank's growth is tied to the region's.
HSBC, which just over a week ago decided not to move itsheadquarters to Hong Kong, said it would raise its total annualdividend to $0.51 per share from $0.50, a relief to investorswho had worried the lender's more constrained capital positionwould cause it to abandon its goal of dividend growth.
The bank also warned that while it is keeping itsheadquarters in London, the possibility of Britain leaving theEuropean Union could cause major disruptions to its business inthe region.
"A disorderly exit could force changes to HSBC's operatingmodel, affect our ability to access the European Central Bankand high-value euro payments, and affect our transaction volumesdue to possible disruption to global trade flows," it cautionedin its annual report.
The bank, which is reining in costs as a result of itshigher regulatory burden, said in its annual report ChiefExecutive Stuart Gulliver's total pay had fallen to 7.34 millionpounds ($10. million) from 7.62 million a year earlier.
($1 = 0.7002 pounds) (Additional reporting by Denny Thomas in Hong Kong and RachelArmstrong and Lawrence White in London; Editing by Miral Fahmyand David Holmes)
HSBC Holdings (HSBA)
