HONG KONG: HSBC on Monday reported a 69-percent slump in net profit, joining a number of major banks whose earnings have been slammed by the coronavirus fallout.
HSBC announced earnings of $3.1 billion (2.6 billion euros) compared with almost $10 billion in the first six months of 2019, as spiralling China-US tensions also hurt the British-based but Asia-focused lender.
HSBC said that its pre-tax profit slid 64 percent to $4.3 billion in the first half while revenue was down nine percent at $26.7 billion.
The figures missed analyst forecasts and the bank also raised its estimate for 2020 loan losses to $13 billion from $8 billion.
Chief executive Noel Quinn described the first six months of the year as "some of the most challenging in living memory".
He added: "Our first-half performance was impacted by the Covid-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility." Even by the standards of the current economic maelstrom engulfing global banks, HSBC has had a torrid time. Before the coronavirus crisis it was beset by disappointing profit growth, ground down by US-China trade war uncertainties and Britain's departure from the European Union.
The London-headquartered bank embarked on a huge cost-cutting initiative at the start of the year, including plans to slash about 35,000 jobs as well as trimming fat from less profitable divisions, primarily in the United States and Europe.
The bank's Asia operations continued to show "good resilience", Quinn said, with profit before tax of $7.4 billion.
The coronavirus upended some of that cost-cutting drive with banks hammered by market volatility and the economic slowdown caused by the pandemic.
But HSBC has a further headache - geopolitical tensions via its status as a major business conduit between China and the West.
HSBC makes 90 percent of its profit in Asia, with China and Hong Kong being the major drivers of growth.
As a result it has found itself more vulnerable than most to the crossfire caused by the increasingly bellicose relationship between Beijing and Washington.
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