HSBC’s first-quarter profit drops 28%
(26 April 2022 – Global) HSBC’s profits fell by 28 percent in the first three months of the year as Europe’s largest lender increased its reserves for bad loans in response to Russia’s war on Ukraine and suffered slowing growth in its primary Asia markets.
The bank’s net profit declined to US$2.8 billion in the three months ended in March, from US$3.9 billion in the same quarter of 2021.
However, the bank beats analysts’ expectations, which forecast pre-tax profits of $3.7 billion, partly thanks to a rise in global lending volumes.
The expected credit losses (ECL) provision in the quarter included US$250 million related to HSBC’s Russia exposure and US$160 million related to its Chinese commercial real estate loan portfolio.
“I’m encouraged by our start to the year. Our strategy is on track, with organic growth and good momentum across most parts of the group,” said HSBC CEO Noel Quinn. “While profits were down on last year’s first quarter due to market impacts on wealth revenue and a more normalised level of [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.”
Subscribe