HSBC boosts bad loan provisions, sees second-quarter profit plunge as coronavirus crushes global business activity
- HSBC warned it could take provisions of up to US$13 billion for expected credit losses this year as coronavirus pandemic weighed on economic activity
- Pre-tax profit was US$1.09 billion, well below a consensus estimate of US$2.46 billion and about a sixth of the US$6.19 billion it reported a year ago
HSBC, the biggest of Hong Kong’s currency-issuing banks, warned it could take provisions for soured loans of as much as US$13 billion this year as its second-quarter profit dropped sharply because of weakening business activity globally from the coronavirus pandemic.
The bank also said it was “accelerating” efforts to cut its costs this year, with 4,000 employees and contractors leaving the company in the first half of the year.
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HSBC sees second-quarter profits plunge by 82 per cent thanks to coronavirus
“We’re clearly committed to delivering on the cost reduction programme we identified in February. We also need to respond to the fact that revenue is softer now than it was,” Noel Quinn, the HSBC chief executive, said on a conference call with analysts.