HSBC profits halved as coronavirus batters global economy

      Published on Tuesday, 28 April , 2020      1026 Views     
HSBC profits halved as coronavirus batters global economy

HSBC on Tuesday said first quarter pre-tax profits almost halved as the banking giant is battered by the global coronavirus pandemic while it embarks on a major restructuring.

The lender reported pre-tax profits of $3.2 billion, down 48 percent from the same period in 2019, citing credit losses from clients hit by the economic slowdown as a major cause.

“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,” newly confirmed CEO Noel Quinn said in a statement.

The Asia-focused lender has embarked on a huge cost-cutting initiative as it battles multiple uncertainties caused by the grinding US-China trade war, Britain’s departure from the European Union and now the pandemic.

Earlier this year it announced plans to slash some 35,000 jobs, trimming fat from less profitable divisions, primarily in the United States and Europe.

But Covid-19 has thrown a spanner into the works with HSBC on Tuesday confirming many of the redundancies would be put on hold for now “to reduce the uncertainty” many of its employees would face in a decimated jobs sector.

Banks are being hammered by market volatility and the economic slowdown caused by the virus crisis.

But they are also on the receiving end of huge bailouts and support from central banks and regulators.

Quinn is tasked with transforming the sprawling international bank, which spans more than 50 countries but makes the vast majority of its profits in Asia.

In recent years HSBC‘s Asia business has done well – fuelled primarily by China – but Europe and the US have disappointed.

Before the coronavirus went global the bank announced plans to make $4.5 billion in cost cuts by 2022, with restructuring costs of around $6 billion.

Many of the cutbacks will be in the European and US investment banking sectors, while units in more profitable Asia and the Middle East would be bolstered.

The restructuring plans are the most ambitious since 2012 when HSBC was caught up in a Mexican money laundering scandal.

Quinn took over as acting CEO after the shock ouster last August of John Flint. He was finally confirmed as the bank’s head last month.

Category Business, Coronavirus | 2020/04/28 latest update at 8:00 PM
Source : Arabian Business | Photocredit : Google
Comments Add comment

Gulf Media

Related Articles

The editorial staff of Saudi Arabia Today would like to give all of its readers from Gulf and Saudi Arabia and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Saudi Arabia Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Saudi Arabia, the Gulf and the world.

Sponsored Publications