FX.co ★ HSBC suffers massive losses during coronavirus crisis

HSBC Holdings plc, a financial services holding company and a joint venture between the UK and Hong Kong, is reportedly incurring tremendous losses. Recently, HSBC has presented its figures for the first six months of this year. Thus, according to the investment bank, its profits decreased fourfold in annual terms. The company’s net profit plummeted to $1.977billion year-on-year which was a considerable loss for the bank.

Currently, the cost of one share of the company does not exceed $0.1, whereas a year ago it was $0.42. Apart from that, HSBC’s operating revenue plunged thrice to $3.36 billion. The bank’s net interest income nosedived by 4.8% to $14.509 billion, while revenue narrowed by 8.9% to $27.645 billion.

In addition, HSBC's parent company suffered a big drop in the second quarter profit: the reading fell 22.7 times and reached $192 million. The banking group’s net interest income also sank by 11.3% to $6.897 billion.

However, the situation is expected to only worsen in the future. According to preliminary estimates, low interest rates, as well as a decline in client’s business activity will trigger an even greater collapse in the short term. The company’s management is ready to do everything to avoid this scenario. Thus, the financial institution is planning to start investing in the sphere of information technologies in order to minimize pressure on profit.

HSBC Holdings plc has been present in the market since 1990. At the same time, HSBC Bank, the Hong Kong and Shanghai Banking Corporation, was established in 1865. Since then, it has been rendering its services successfully.