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HSBC profit plunges by 69 per cent

Banking giant HSBC has reported a 69 per cent drop in profit after tax for the first half of the year, citing higher credit losses and lower revenue due to the coronavirus pandemic.

The group, one of Europe’s largest, said its profit after tax was $US3.1 billion ($4.34b). A year ago, it reported $US9.9b in profit after tax for the six-month period from January to June.

“Our first half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility,” chief executive Noel Quinn said.

Reported revenue dropped by almost 10 per cent to $US26.7b for the period ending in June.

Reported expected credit losses increased by $US5.7b to $US6.9b, the group said, citing the impact of the coronavirus outbreak and “the forward economic outlook”.

HSBC is headquartered in London, but conducts much of its business in Asia, including Hong Kong.

Despite higher expected credit losses in Asia, the group said its pre-tax profit in the region increased in the period.

Mr Quinn added that “current tensions between China and the United States inevitably create challenging situations for an organisation with HSBC’s footprint”.

The bank said it had increased loan loss provisions from $US8.7b at the end of December to $US13.2b at the end of June.

The bank was also moving ahead with plans to reduce its total workforce from 235,000 to about 200,000 in the coming three years.

Reuters

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