HSBC quarterly profit down 30 percent
HONG KONG
HSBC said yesterday that first-quarter profits dropped nearly 30 percent owing to higher-than-expected credit losses and inflation but the Asia-focused lending giant remained upbeat about its outlook.
The London-based bank announced pre-tax profits of $4.2 billion for January-March, down 28 percent on-year but beating estimates, while reporting revenue declined four percent to $12.5 billion.
“While profits were down on last year’s first quarter due to market impacts on wealth revenue and a more normalised level of ECL (expected credit losses), higher lending across all businesses and regions, and good business growth in personal banking, insurance and trade finance bode well for future quarters,” chief executive Noel Quinn said in
a statement.
Russia operations
The lender reported an ECL of $600 million, compared with a release of $400 million from the same period
last year.
The bank said it continued to expect “mid single-digit percentage” growth this year for revenue and lending respectively.
“The repercussions from the Russia-Ukraine war, alongside the economic impacts that continue to result from COVID-19, have pushed up the prices of a broad range of commodities, with the resulting increase in inflation creating further challenges for monetary authorities and our customers,” the bank said.
Quinn said the “vast majority” of HSBC's business in Russia serves multinational corporate clients headquartered in other countries, and the bank was implementing sanctions put in place by the United Kingdom and other governments.
But the bank forecast its operation in Russia may become “untenable” if subject to further restrictions.
