Three big banks in Hong Kong post sharp profit fall
Rising bad debts, poor investment market and Brexit hurt HSBC, Standard Chartered and Hang Seng Bank badly in first half while outlook uncertain
Three major banks in Hong Kong – HSBC Holdings, Hang Seng Bank and Standard Chartered – all reported sharp falls in their first-half profits on Wednesday as they were hard hit by the global economic slowdown and investment market uncertainties.
The banks’ top executives and analysts warned of tough times ahead as the mainland economic slowdown would continue to cut loan demand and cause a rise in bad debts, while poor investment sentiment would put downward pressure on fee income.
HSBC, the city’s biggest lender and one of the world’s largest, said pre-tax profit dropped 29 per cent to US$9.71 billion, while revenue fell 10.5 per cent to US$29.47 billion, hurt by shrinking fee income from equities trading in Hong Kong and a slumping pound after Britain’s vote to leave the European Union.
At subsidiary Hang Seng Bank, net profit slumped 60 per cent as rising bad loans and lower fee income weakened a balance sheet that was helped in the year-ago period by a one-time gain. Excluding the gain, the bank’s profit was down 15 per cent.
Standard Chartered said pre-tax profit plunged 46 per cent to US$994 million as volatile global markets hurt its trading income in the first half.