HSBC sees bad loans to mount as pandemic halves profit in Q1 – Gulf Today

HSBC sees bad loans to mount as pandemic halves profit in Q1 – Gulf Today

HSBC Holdings on Tuesday warned of more earnings pain ahead after first-quarter profit nearly halved as it set aside a hefty $3 billion in bad loan provisions due to the coronavirus pandemic.. Europe's biggest bank said the outbreak would mean sustained pressure on its revenue as customer activity declined and lower interest rates squeezed margins, while noting increased fraudulent activity could lead to "potentially significant" credit losses.. Analysts said the bank could look to permanently tweak its dividend payouts, long a source of attraction for the stock but a burden for the bank when times are tough.. The London-headquartered bank, which generates the bulk of its profits in Asia, said it plans to reduce its operating costs to mitigate the fall in revenue which is set to lead to "materially lower" profitability in 2020 than last year.. The bank reiterated that it would press ahead with plans to shift capital from underperforming businesses and reduce other costs..