HSBC's First-Quarter Net Profit Fell 28% on Steeper Credit Losses
April 26 2022 - 1:04AM
Dow Jones News
By Clarence Leong
HSBC Holdings PLC's first-quarter net profit declined 28% due to
a net charge for expected credit losses and lower revenue, although
the revenue outlook is positive thanks to rising interest
rates.
Net profit fell to $2.80 billion in the quarter, down from $3.88
billion in the same period last year, the Asia-focused lender said
Tuesday.
"I'm encouraged by our start to the year," Chief Executive Noel
Quinn said in a statement. "Our strategy is on track, with organic
growth and good momentum across most parts of the group."
The Russia-Ukraine war has heightened inflationary pressures and
added uncertainty to the economic outlook, leading HSBC to set
aside more provisions against bad loans. It reported a net charge
of $642 million for the quarter, compared with a net release of
$435 million a year earlier.
Revenue slipped 4% to $12.46 billion, compared with $12.99
billion in the year-earlier period, mainly due to weakness in its
wealth and personal-banking segment. Its net interest margin rose 7
basis points from the fourth quarter, to 1.26%.
The revenue outlook is positive, as growth in net interest
income is expected to continue given that the market is expecting
more favorable policy-rate movements, while lending growth this
year is forecast to expand by a mid-single-digit percentage, it
said.
Write to Clarence Leong at clarence.leong@wsj.com
(END) Dow Jones Newswires
April 26, 2022 00:49 ET (04:49 GMT)
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