HSBC recorded a 14% drop in adjusted revenue in the last quarter, as very low interest rates weighed on its operations. Combined with a 60% increase in credit reduction expenses to $ 1.2 billion due to significant economic uncertainty in the UK, the result was a 50% drop in adjusted earnings before tax to $ 2.2 billion .
Europe’s largest bank experienced an 8% drop in adjusted revenue for the full year and a 45% drop in pre-tax adjusted profits to $ 12.1 billion. In addition, its credit reduction charges increased by about 226%, to $ 8.8 billion.
“In 2020, our people provided an exceptional level of support to our customers in very difficult circumstances, while our strong balance sheet and liquidity gave guarantees to those who trust us,” said CEO Noel Quinn at earnings release.
“We achieved this while delivering solid financial performance in the context of the pandemic – particularly in Asia – and laying a solid foundation for our future growth.”
In fact, HSBC made $ 12.8 billion in pre-tax adjusted profits from its operations in Asia last year, which offset a loss of $ 4.2 billion in Europe.
Three of the bank’s four segments generated less revenue in 2020. Pre-tax adjusted profits fell 53% in the fortunes and personal banking division, 74% in the commercial banking division and 7% in the global banking and market segment.
HSBC shares fell 1.7% on London’s FTSE 100 index on Tuesday, ranking them among the worst performers among major European banks.