HSBC Profits Plunge 69% Due to COVID-19 and Global Tensions

HSBC announces profits have plunged as a result of COVID-19 and global tensions

HSBC announced today that its profits for the first half of 2020 dropped by 69 per cent due to being hit by both Covid-19 and an increase in tensions between the US and China.

Post-tax profit for the bank stood at US$3.1 billion, with pre-tax profit of US$4.3 billion and revenue declining by nine per cent to US$26.7 billion.

CEO Noel Quinn described the period as among the “most challenging in living memory”.

He told the Hong Kong stock exchange, “Our first-half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility.”

A total of 90 per cent of HSBC’s profit comes from Asia and much of that from China and Hong Kong. This has caused HSBC to attempt to walk a fine line between China and the West.

“Current tensions between China and the US inevitably create challenging situations for an organisation with HSBC’s footprint,” Quinn said, adding, “however, the need for a bank capable of bridging the economies of East and West is acute, and we are well placed to fulfil this role.”