HSBC profits double as credit losses reversed

28 April, 2021 12:00 AM printer

HONG KONG: HSBC said on Tuesday that first-quarter profits more than doubled, helped by a reversal in credit losses as well as its ongoing restructuring and pivot to Asia.

Adjusted profit before tax rose 109 percent to $6.4 billion although reported revenue slipped five percent on year to $13.0 billion in part because of low interest rates, reports AFP.

The results, which beat estimates, are a shot in the arm for the Asia-reliant lender after a tumultuous year that saw its fortunes take a hammering from the coronavirus and simmering geopolitical tensions.

"I am pleased with our revenue and cost performance, but particularly with our significantly lower expected credit losses," Chief Executive Officer Noel Quinn said in a statement.

Quinn struck a cautiously optimistic note for the near future with hopes high that mass vaccinations may start to ease pressure on the global economy, even as infections continue to soar.

"The economic outlook has improved, although uncertainties remain," he said.

Bright spots included a $400 million reversal in credit losses as well as its Europe and the US regions returning to profit. In the UK, pre-tax profits were more than $1.0 billion for the quarter.

Like all banking giants HSBC was battered by the coronavirus last year with a 30 percent plunge in 2020 profit. Under Quinn, the bank has embarked on a dramatic restructuring, rolling out plans to cut its workforce by about 35,000 to drive down costs and to refocus on its most profitable areas -- Asia and the Middle East.

HSBC makes 90 percent of its profit in Asia, with China and Hong Kong the major drivers of growth.

In February it published a new strategy laying out plans to redouble its attempt to seize more of the Asian market.