By Martin Mou 
 

HSBC Holdings PLC said Tuesday that its third-quarter net profit plummeted from a year earlier, mainly as revenue dropped on a low interest-rate environment world-wide during the Covid-19 pandemic.

Net profit for the period tumbled 54% to $1.36 billion from $2.97 billion, said the U.K.-based, Asia-focused bank. A FactSet poll of analysts had tipped a net profit of $2.21 billion for the quarter.

Third-quarter revenue was down 11% on year to $11.93 billion due to interest-rate reductions on its deposit franchises across its global businesses, the lender said.

HSBC, which makes most of its profits in Asia, expects lower global interest rates to keep pressuring its net interest income, which could bring further headwinds to its net interest income in the fourth quarter of the year.

However, the bank said that it recorded significantly lower credit losses in the third quarter and now projects its credit losses to trend toward the lower end of its guided range between $8 billion and $13 billion.

Impairment costs had been a major drag on the bank's performance for the first half.

HSBC said it also expects to cut its 2022 annual cost base beyond the original target of $31 billion.

The London-based lender, which has suspended dividend payouts to preserve cash, said a decision on whether to pay a dividend for 2020 will depend on economic conditions in early 2021 as well as a regulatory consultation.

"We will seek to pay a conservative dividend if circumstances allow," said Noel Quinn, group chief executive.

 

Write to Martin Mou at martin.mou@wsj.com

 

(END) Dow Jones Newswires

October 27, 2020 00:44 ET (04:44 GMT)

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