World HSBC sees 34% drop in profits from Covid impact
HSBC ramps up Asia pivot as pandemic hammers profits
HSBC on Tuesday vowed to accelerate its Asia pivot despite spiralling tensions between China and the West after it reported a 30 percent plunge in profits for 2020 caused by the coronavirus pandemic. Reported profit after tax came in at $6.1 billion, which the bank blamed primarily on higher-than-expected credit losses and other bad debts. The results came as HSBC published a new strategy laying out plans to redouble its attempt to seize more of the Asian market -- the region of the world where Europe's largest lender makes the vast majority of its profits.
HSBC has reported a 34% drop in profits as its global business deals with the impact of the Covid-19 pandemic.
While annual profits slumped by slightly more than one third, they are better than analysts expected.
The bank reported profit before tax of $8.78bn (£6.24bn) for 2020, down from $13.35bn a year earlier.
At Tuesday's announcement, UK-based HSBC said it would pay a dividend of $0.15 a share in cash, the first payout announced since October 2019.
Europe's biggest bank is expected to give an update on its strategy later on Tuesday, which many analysts predict will see it accelerate its "pivot to Asia".
HSBC's profits plunge 45% as low interest rates and bad loans take their toll
HSBC posted a 45% decline in profits to $US12.1 billion in 2020. The bank earned $US12.8 billion in Asia, but lost $US4.2 billion in Europe. HSBC earned lower profits in three of its four divisions. Visit the Business section of Insider for more stories. HSBC posted a 14% slump in adjusted revenue last quarter, as rock-bottom interest rates weighed on its operations. Combined with a 60% surge in credit-impairment charges to $US1.2 billion due to significant economic uncertainty in the UK, the result was a 50% plunge in adjusted pre-tax profits to $US2.2 billion.
While headquartered in the UK, the bulk of HSBC's profits come from Asia.
Reports have also suggested the Hong Kong-founded bank will also give more details on plans to scale back its US retail banking operations.
HSBC has a 150-branch network in the US and it would mark the end of the bank's 40-year association there.
HSBC chairman Mark Tucker told the Asian Financial Forum conference in January that there were "real opportunities to grow our wealth business and expand across South Asia".
But the bank has come under fire for its endorsement of a controversial national security law that China has imposed on Hong Kong.
HSBC has also been severely criticised by British MPs and US politicians for closing the accounts of pro-democracy activists.Carrie Lam, Hong Kong's chief executive, has praised the bank in recent weeks, saying she would "love" for HSBC to expand in the city. Founded in 1865 as the Hongkong and Shanghai Banking Corp., HSBC moved its base to London in 1993 after buying Midland Bank in the run-up to the colony's 1997 return to China.
Scott Morrison posted pictures of his COVID-19 vaccination on Facebook. And then the anti-vaccine commenters appeared .
Prime Minister Scott Morrison last week became one of the first Australians to receive a COVID-19 vaccine. His vaccination unleashed a wave of anti-vaccine misinformation on Facebook.You can read the latest edition below, and to have the next newsletter delivered straight to your inbox.