The Global Private Banking unit of HSBC has reported strong Q1 2020 performance amidst high volatility in equity markets and Covid-19 crisis, and attracted $5.3bn of net inflows mainly in Asia and Europe.
Adjusted pre-tax profit at the unit surged by $23m or 23% to $121m on a year-on-year basis.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The unit’s adjusted revenue increased by $60m to $511m.
Adjusted operating expenses declined by $10m due to cost reduction in Switzerland.
Revenue in Global Markets increased by $0.4bn, driven by increased client activity due to market turbulence.
Key group metrics
At a group level, profit almost halved in Q1 2020 as the banking group increased its bad loans reserves to $3bn in order to support customers affected by the Covid-19 crisis.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataReported pre-tax profit plummeted 48% year-on-year to $3.2bn.
Revenues for Q1 2020 were $13.7bn, a decrease of 5% compared to the year ago period.
HSBC group CEO Noel Quinn said: “The economic impact of the Covid-19 pandemic on our customers has been the main driver of the change in our financial performance since the turn of the year.
“The resultant increase in expected credit losses in the first quarter contributed to a material fall in reported profit before tax compared with the same period last year.”
HSBC has decided not to make any quarterly or interim dividend payments until the end of 2020 after regulatory pressure.
The bank recently also announced plans to slash 35,000 jobs.
However, it has now put the downsizing exercise on hold due to the pandemic.
“The impact and duration of the Covid-19 crisis will likely lead to higher ECL and put pressure on revenue due to lower customer activity levels and reduced global interest rates,” HSBC said.
The bank intends to lower operating costs to mitigate the expected revenue decline.
