Profit as HSBC nearly halved as the bank set aside more money in anticipation of a surge in bad loans.
Julian Satterthwaite reports.
HSBC profit nearly halves as bad loan fears mount
HSBC says first-quarter profit nearly halved.
And it’s warning that there’s more pain to come.
That as it boosts provisions against an expected surge in bad loans.
Pre-tax profit came in at 3.2 billion dollars for the January-March quarter.
That’s down from 6.2 billion a year ago, and well below analyst forecasts.
One way or another, it’s all about the global health crisis.
The virus-driven tumble in oil prices was one negative.
But the big concern is just how many loans will turn sour as businesses struggle.
HSBC increased expected credit impairment charges from 600 million dollars to 3 billion.
It said total provisions for the year could go as high as 11 billion dollars.
The bank says it will now try to cut costs to offset the falling income.
Its shares were down over 1% in early trade Tuesday (April 28) even as broader markets rose.
Not such a glum day for all lenders though.
Swiss bank UBS posted a 40% jump in quarterly profit.
It was helped by ultra-rich clients shuffling their portfolios to cope with the virus crisis.
The bank also said its outstanding loans weren’t a big worry.
UBS shares rose around 5% from the open.