Mon. Nov 28th, 2022

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HSBC profits hammered by pandemic and soaring US-China tensions

1 min read
HSBC

HSBC on Monday said profits for the first half of 2020 plunged by 69 percent on year as the banking giant was hammered by the coronavirus pandemic and spiralling China-US tensions.

The lender reported post-tax profits of $3.1 billion while pre-tax profit was $4.3 billion, a 64 percent drop on the same period last year. Reported revenue was down nine percent at $26.7 billion.

Chief executive Noel Quinn described the first six months of the year as “some of the most challenging in living memory”.

Even by the standards of the current economic maelstrom engulfing global banks, HSBC has had a torrid year.

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 Asia-focused lender embarked on a huge cost-cutting initiative at the start of the year, including plans to slash some 35,000 jobs as well as trimming fat from less profitable divisions, primarily in the United States and Europe.

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.

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