HSBC first-quarter profit halves on increased loan loss provisions due to coronavirus crisis

HSBC said last week it is pressing ahead with plans outlined in February to shift capital from underperforming businesses, reduce costs and strip out layers of management.

Reuters April 28, 2020 17:51:32 IST
HSBC first-quarter profit halves on increased loan loss provisions due to coronavirus crisis

Hong Kong/London: HSBC Holdings PLC’s first-quarter profit nearly halved from a year-ago, missing estimates, after boosting provisions against bad loans as the coronavirus pandemic hits borrowers worldwide.

Europe’s biggest bank by assets said profit before tax came in at $3.21 billion for January-March, down from $6.21 billion a year ago and below an average analyst forecast of $3.67 billion compiled by the bank.

HSBC firstquarter profit halves on increased loan loss provisions due to coronavirus crisis

Representational image. Reuters

The bank increased its expected credit impairment charges by a hefty $2.4 billion to $3 billion due to the impact of COVID-19 and weakening oil prices as well as “a significant charge related to a corporate exposure in Singapore”, it said.

HSBC warned the impact of the pandemic on the global economy would mean a rise in bad loans, and sustained pressure on its revenues as customer activity declined and lower central bank interest rates squeezed margins.

It also said a rise in fraudulent activity could lead to “potentially significant” credit losses.

The London-headquartered bank said it plans to reduce its operating costs to try and mitigate the fall in revenue, leading to “materially lower” profitability in 2020 than last year.

HSBC said last week it is pressing ahead with plans outlined in February to shift capital from underperforming businesses, reduce costs and strip out layers of management. But it has paused job cuts to avoid disruption and leaving staff unable to find work elsewhere.

Updated Date:

also read

Taiwan says it is witnessing 'less Chinese interference' ahead of elections
World

Taiwan says it is witnessing 'less Chinese interference' ahead of elections

While speaking to reporters ahead of Saturday’s elections in Taiwan for mayors and councillors, Joseph Wu said that China was always a factor when his nation voted, however, this time around Beijing was meddling less

More than 20,000 new hires left Apple supplier Foxconn's plant in China
World

More than 20,000 new hires left Apple supplier Foxconn's plant in China

The workers are leaving the plant in Zhengzhou in the wake of bloody clashes with police, in which more than a dozen protesters were hurt, furious about Foxconn's failure to deliver promised bonuses

China COVID-19: People intensify protest against stringent lockdowns as govt tries to tackle sharp rise in cases
World

China COVID-19: People intensify protest against stringent lockdowns as govt tries to tackle sharp rise in cases

Chinese social media and Twitter have many videos of public protests, including a mass demonstration in Shanghai where people in a rare display of anger shouted slogans against the ruling Communist Party of China (CPC) and President Xi Jinping