Amid the Covid-19 outbreak, HSBC has managed to survive the first quarter of the year without posting major losses. The London-based banking unit posted an unexpected first-half pre-tax profit and boosted its provisions for bad loans despite fear of potential loan losses.
Noel Quinn, chief executive of HSBC, told the media, “Having paused parts of our transformation programme in response to the Covid-19 outbreak, we now intend to accelerate implementation of the plans we announced in February.”
It is reported that HSBC’s pre-tax profit for the first quarter of the year was $1.09 billion. The bank incurred a $192 million profit on a net basis in the second quarter of the year, from $1.14 billion in the previous year.
The provision amount for bad loans was $6.86 billion compared to $1.14 billion last year. The bank has been compelled to increase its provision amount because of the credit losses fear.
HSBC’s revenue fell 12.1 percent to $13.1 billion in the first quarter and its net interest income incurred an 11.7 percent slump to $6.9 billion.
Mr. Quinn added that the company is also looking to take additional actions in light of the new economic conditions to make the bank’s business stronger and more sustainable amid the pandemic.
The Covid-19 outbreak and Hong Kong unrest have compelled HSBC to change its business strategies and other developments. So far, many banks across the world have incurred huge losses this year.