HSBC profits hammered by pandemic and soaring US-China tensions

HSBC said on Aug. 3 profits for the first half of 2020 plunged by 69 percent on year as the banking giant was hammered by the coronavirus pandemic and spiralling China-U.S. tensions.    

The lender reported post-tax profit of $3.1 billion while pre-tax profit was $4.3 billion, a 64 percent drop on the same period last year. Reported revenue was down nine percent at $26.7 billion.    

The figures missed analyst forecasts and the bank also raised its estimate for 2020 loan losses from $8 billion to $13 billion.    

Its shares plunged more than four percent on the Hong Kong stock exchange after the results were released in the lunch break, trading at HK33.55.    

Chief executive Noel Quinn described the first six months of the year as "some of the most challenging in living memory".  

"Our first-half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility," he said in a statement to the Hong Kong stock exchange.    

Even by the standards of the current economic maelstrom engulfing global banks, HSBC has had a torrid time.

Before the coronavirus crisis it was beset by disappointing profit growth, ground down by U.S.-China trade war uncertainties and Britain's departure from the European Union.    

The Asia-focused lender embarked on a huge cost-cutting initiative at the start of the year, including plans to slash about 35,000 jobs as well as trimming fat from less profitable divisions, primarily in the United States and Europe.

The coronavirus upended some of that cost-cutting drive with banks hammered by market volatility and the economic slowdown caused by the pandemic.    

But HSBC has a further headache -...