HSBC Q2 Profit Down; Says Outlook Highly Uncertain - Quick Facts

(RTTNews) - Asia-focused lender HSBC Holdings Plc (HSBC, HSBA.L) reported Monday that its second-quarter profit before tax plunged 82 percent to $1.09 billion from last year's $6.19 billion.

Profit after tax was $617 million, down 88 percent from last year's $5.03 billion.

The results reflected higher ECL and lower revenue, which included the non-recurrence of a prior year gain of $0.8 billion. This was partly offset by a reduction in operating expenses, despite a $1.2 billion impairment of software intangibles.

Net operating income fell to $9.23 billion from last year's $14.39 billion.

Revenue was $13.06 billion, lower than $14.94 billion a year ago.

Net interest margin was 1.33 percent, down 21 basis points from the first quarter, primarily reflecting the initial impact of the reduction in interest rates due to the Covid-19 outbreak.

Looking ahead, the company said its outlook is highly uncertain and dependent on the path and speed of economic recovery.

The company continues to face a wide range of potential economic outcomes for the second half of 2020 and into 2021, partly dependent on the extent of any potential impacts from new waves of Covid-19, the path to the development of a possible vaccine and market and consumer confidence levels.

The company plans to provide an update on medium-term financial targets and dividend policy at its year-end results for 2020.