HSBC bank reported a drop of more than a quarter of its net profit in the first quarter of 2022 on Tuesday. The British banking giant attributed the decline to larger than expected credit losses, high inflation and the war in Ukraine.
From January to March, HSBC made a net profit of 2.803 billion US dollars (2.66 billion francs), once morest 3.880 billion in the same period of 2021, the group said in a press release. The general manager of the establishment, Noel Quinn, indicated, quoted in the press release, ‘that profits were down compared to the first quarter of last year due in particular to credit losses’, which amounted to 600 million dollars once morest 400 million last year.
However, the bank still expects ‘mid-single-digit percentage’ growth this year in revenue and lending. “Increased lending across all lines of business and all regions, good growth in retail banking, insurance and trade finance all bode well for the quarters ahead,” he said. Mr Quinn.
The results were released amid Russia’s invasion of Ukraine, which the bank said is exacerbating inflationary pressures and contributing to higher credit loss charges for the quarter. ‘The repercussions of the war between Russia and Ukraine, together with the continuing economic impacts resulting from Covid-19, have driven up the prices of a wide range of commodities and increased inflation resulting poses new challenges for monetary authorities and our customers,” the bank said.
Mr Quinn said the ‘vast majority’ of HSBC’s business in Russia was for multinationals headquartered in other countries, and the bank was enforcing sanctions put in place by the UK and others governments. But the bank predicted that its operations in Russia might become “unsustainable” in the event of new restrictions.
/ATS