Tax profits at HSBC, Europe’s largest bank, fell 65% in the first half, and lender’s precautionary loan losses can exceed $13 billion, as the coronavirus pandemic and low interest rates affected the bank’s performance.
The London-based bank reported before-tax earnings of $4.3 billion in the first six months of the year, two-thirds less than in 2019.
He also raised his estimate of receivables this year “based on a deterioration in economic forecasts,” warned that it could suffer a hit of up to $13 billion, as opposed to a previous estimate of $11 billion.
Income also fell 9%, partly due to low interest rates.
CEO Noel Quinn said in a statement that the bank would now push for restructuring plans announced in February, adding the loss of 35,000 jobs, which were suspended in April to protect staff from the economic crisis.
“We are also in the additional steps we want to take light of the new economic environment to make HSBC a more powerful and more sustainable business,” Quinn added.
Before taxes for the bank’s Asian franchise were $7.4 billion.
HSBC is not the only bank to have been affected by bad debts, while primary industries, adding aviation and recreation, have stagnated in the middle of the pandemic. U.S. lenders have also set aside billions, anticipating an increasing number of loans that are likely to worsen as the crisis continues. Meanwhile, Monday’s effects mean the bank has cutbacks as much as it can imagine and will restart its crusade to save $4.5 billion by 2022.
40% That’s the drop in HSBC’s percentage this year in London and Hong Kong.
The pandemic is just one of the crises facing new CEO Noel Quinn as he confronts HSBC caught in the crossfire of tensions between Beijing and Washington. Last week, the London-based bank, whose profits weigh heavily on China and Hong Kong, denied repeated accusations through Chinese state media that it had “caught” the Huawei generation as it continued its legal war with the United States. Following the tension in Beijing, the bank said it supported China’s debatable national security law imposed on Hong Kong, much to the chagrin of US Secretary of State Mike Pompeo.
Quinn said: “Tensions between China and the United States inevitably create difficult conditions for an organization with HSBC’s footprint. We will face all the demanding political conditions that remain focused on the long-term wishes of our clients and the interests of our investors »
HSBC profits crash when European bank hits through coronavirus (Forbes)
HSBC cuts 35,000 jobs from primary review (Forbes)
HSBC denies collusion with the U.S. To “frame” Huawei from China Mounts (CNN)
HSBC is the perfect victim of China (quartz)
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I’m a last-minute reporter for Forbes in London, covering Europe and the United States. Previously, I was a journalist for HuffPost UK, the Press Association and one night
I’m a senior journalist from Forbes in London, covering Europe and the United States. Previously, I was a journalist for HuffPost UK, the Press Association and an evening reporter at the Guardian. I studied social anthropology at the London School of Economics, where I was editor of one of the university’s global business journals, London Globalist. This led me to Goldsmiths, University of London, where I finished my master’s degree in journalism. Do you have a story? Contact us at [email protected] or stay on Twitter @bissieness. I’m waiting for your answer.