Bank figures down
HSBC Q1 profits plunge by half as virus strikes
Bank likely to step up cost cutting (pic: Terry Murden)
HSBC’s first-quarter profit plunged by 48% as it took a hit from its exposure to the lockdown, particularly in China.
Profit before tax came in at $3.21 billion for three months to the end of March, against $6.21bn a year ago and well short of the $3.67 billion forecast.
Europe’s biggest bank by assets has called a temporary halt to job cuts to ease disruption and help those who may struggle to find alternative employment.
But the figures will focus attention on reducing costs and stripping out layers of management.
Chief Executive Noel Quinn said: “The economic impact of the Covid-19 pandemic on our customers has been the main driver of the change in our financial performance since the turn of the year.
“The resultant increase in expected credit losses in the first quarter contributed to a material fall in reported profit before tax compared with the same period last year.”
The lender’s net interest margin in the period was down to 1.54% from 1.59% a year before.
HSBC posted a loss of $511m in Europe during the first quarter, compared to a $14m loss a year before. In North America, it sank to a $111m loss from a $379m profit. In the Middle East & North Africa, profit was almost wiped out, slipping to $44m from $465m.
The company has already cancelled its 2019 fourth-quarter dividend.