The London-based lender said pre-tax profit in the first half of the year fell 65% to $ 4.3 billion compared to the same time last year as revenues fell and credit losses were worse than expected.
“Our first-half performance was affected by the Covid-19 pandemic, falling interest rates, rising geopolitical risk and rising levels of market volatility,” CEO Noel Quinn said in a statement.
The bank added that expected credit losses for 2020 could reach up to $ 13 billion this year, worse than previous estimates “given the deterioration of consensus economic forecasts”.
The company also revealed a $ 1.2 billion write-off due to “software intangible damage, mainly in Europe”;.
Declining incomes did not help either. The bank’s revenue fell 9% in the first half compared to the same time last year, hurting profits even more.
Now, Quinn said, the bank will have to “accelerate” those plans, as well as review “what additional actions we need to take in light of the new economic environment to make HSBC a stronger and more sustainable business.”
Quinn acknowledged the impact of geopolitical difficulties on Monday, saying in a statement that “current tensions between China and the US inevitably create challenging situations for an organization with an HSBC footprint.”
“We will face any political challenge that arises with a focus on the long-term needs of our customers and the best interests of our investors,” he added, without elaborating.
Asia continued to be a bright spot in bank profits.
The company withdrew $ 7.4 billion in pre-tax profits there during the first half, “demonstrating the continued strength and sustainability of our operations in the region and underscoring the importance of Asia to the group,” she said.
HSBC shares in Hong Kong fell 4% after earnings ratio. Shares of the bank in London and Hong Kong are both more than 40% so far this year.