HSBC says net profit plunged 96% in 2Q as pandemic took hold

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FILE – In this Aug. 28, 2015, file photo, people walk past a branch of HSBC bank in London. Europe’s biggest bank, HSBC, has reported Monday, Aug. 3, 2020, its net profit plummeted 96% in the second quarter of this year as lower interest rates combined with the downturn due to the coronavirus pandemic stunted business activity. (AP Photo/Frank Augstein, File)

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LONDON (AP) — Europe’s biggest bank, HSBC, said Monday that its net profit plummeted 96% in the second quarter of this year as lower interest rates combined with the downturn due to the coronavirus pandemic tool 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.

London-based HSBC has most of its business in Asia.

Near-zero interest rates meant to help businesses keep running with cheap credit are squeezing margins for lenders. The bank forecasts expected credit losses of $8 billion-$13 billion in 2020, though it said that was “subject to a high degree of uncertainty.”

Earlier this year, the bank said it will shed some 35,000 jobs as part of an overhaul to focus on faster-growing markets in Asia and as it tries to cope with a slew of global uncertainties, from Brexit to the trade wars to the pandemic.

The bank’s chief executive, Noel Quinn, said in a presentation posted online that HSBC paused its restructuring efforts in the last quarter to focus on supporting its customers.

The bank’s net profit fell 53% to $6 billion in 2019.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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