HSBC
Image Source: Dennis Sylvester Hurd
HSBC announced today that its profit before tax was down by 48 per cent, dropping to $3.2bn.
Chloe Shakesby

HSBC sees profits drop by half as pandemic causes credit losses

A UK bank has reported that its profits have halved in the first quarter of the year due to the impact of the current pandemic.

HSBC announced today that its profit before tax was down by 48 per cent, dropping to $3.2bn.

It said that the drop primarily reflected the global impact of the coronavirus outbreak, as well as weakening oil prices.

The company also saw revenue drop by 5 per cent, as a result of “adverse market impacts”.

Noel Quinn, group chief executive, commented: “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.

“HSBC has always been there for our customers in times of crisis, and we are working hard to support them during this unprecedented period of disruption.

“We do so from a position of strength, with robust levels of capital, funding and liquidity.

“The market-specific support measures that we are offering our personal and business customers have had strong take-up, and we remain responsive to their changing needs.

“We are also working closely with governments around the world to channel fiscal support to the real economy quickly and efficiently.”

The company announced earlier this year its plans to cut 35,000 jobs as part of its restructuring, but said last week that it would delay these redundancies.

“I take the well-being of our people extremely seriously.

“We have therefore paused the vast majority of redundancies related to the transformation we announced in February to reduce the uncertainty they are facing at this difficult time.

“We continue to press forward with the other areas of our transformation with the aim of delivering a stronger and leaner business that is better equipped to help our customers prosper in the recovery still to come.”

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