HSBC profit plummets 96% in second quarter
HSBC, Europe’s biggest bank, said on Monday that its net profit plummeted 96 per cent in the second quarter of this year as lower interest rates combined with the downturn because of the coronavirus pandemic took hold.
The bank’s net profit was $192 million in the April-June quarter, down from $4.37 billion reported in the same period a year earlier. Net profit in the first quarter of the year was $1.79 billion.
London-based HSBC has most of its business in Asia, where the pandemic began, first emerging in central China.
Near-zero interest rates meant to help businesses keep running with cheap credit are squeezing margins for lenders. The bank forecasts credit losses of $8 billion-$13 billion in 2020, though it said that was “subject to a high degree of uncertainty”.
HSBC said its lending in the last quarter fell 3 per cent to $29 billion, while deposits rose 6 per cent to $85 billion as customers saved more and spent less.