Bank profits fall
HSBC loan-losses add to tensions in Hong Kong
HSBC: geopolitical tensions add to bank’s problems
HSBC warned of the impact of tension between the US and China on its business as it reported a higher-than-expected 65% slump in first-half pre-tax profit.
The Asia-focused bank also increased its provisions against bad loans.
Noel Quinn, chief executive, noted the increasing risk to the business from the dispute between Washington and Beijing. Mr Quinn has sided with the Chinese in the political unrest in Hong Kong, a key market for the bank.
“HSBC has to operate in a difficult geopolitical environment. Current tensions between China and the US inevitably create challenging situations for an organisation with HSBC’s footprint,” he said.
Quarterly provisions for potential loan losses surged to $3.8bn from $555m a year ago.
PTP for the first six months this year came in at $4.32 billion (£3.3bn), against $12.41bn in the same period a year earlier.
The profit fell lower than the $5.67bn average of analysts’ estimates compiled by the bank. Revenue fell 9%.
Its credit impairment provisions in the first-half rocketed from $1bn last time to $6.9bn, having set aside $3bn to cover loan losses in the first quarter.