HSBC said Tuesday its third-quarter post-tax profits plunged 46% on-year as the Asia-focused banking giant continued to take a hammering from the coronavirus pandemic and spiraling China-US tensions.
The global economic slowdown caused by the virus has hit financial giants hard and there is little optimism on the horizon as Europe and the United States head into the winter with infections soaring once more.
But HSBC has a further headache – geopolitical tensions via its status as a major business conduit between China and the West.
The Asia-focused lender is in the midst of a worldwide overhaul, aiming to slash some 35,000 jobs by 2022.
“We are accelerating the transformation of the group, moving our focus from interest-rate sensitive business lines towards fee-generating businesses, and further reducing our operating costs,” chief executive Noel Quinn said in a statement attached to the results.
Reported post-tax profit for the third quarter came in at US$2 billion with revenue down 11% at $11.9 billion, the statement said.
Quinn described the latest figures as “promising results against a backdrop of the continuing impacts of Covid-19 on the global economy.”
In the first six months of 2020, HSBC’s post-tax profits were down 69%, meaning the third-quarter results were something of an improvement as some major economies relaxed some of their anti-coronavirus restrictions.
But like many other banks, defaults among clients are rising. HSBC said expected credit losses had risen to $13.7 billion in September compared with $8.7bn at the end of last year – just before the pandemic started.