LONDON -- Europe's biggest bank, HSBC, said Monday that its net profit plummeted 96% in the second quarter of this year as lower interest rates combined with the downturn from the coronavirus pandemic took hold.
The bank's net profit attributable to ordinary shareholders was $192 million in the April-June quarter, down from $4.37 billion reported in the same period a year earlier.
London-based HSBC has most of its business in Asia, where the pandemic began, first emerging in central China.
Near-zero interest rates meant to help businesses keep running with cheap credit are squeezing margins for lenders. The bank forecasts expected credit losses of $8 billion-$13 billion in 2020, though it said that was "subject to a high degree of uncertainty."
HSBC said its lending in the past quarter fell 3% to $29 billion while deposits rose 6% to $85 billion as customers saved more and spent less.
Revenue slipped 12% to $5.6 billion thanks to slimmer interest rate margins and weaker wealth management activity.
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One area of growth was mobile payments, which j more than double from a year earlier to $71.4 billion.
Earlier this year, the bank said it will shed some 35,000 jobs as part of an overhaul to focus on faster-growing markets in Asia and as it tries to cope with a slew of global uncertainties, from Brexit to the trade wars to the pandemic.