HSBC experiences outcomes for the third quarter of 2020
Pedestrians in protective masks walk past a logo displayed in an HSBC bank branch in the central district of Hong Kong.
Roy Liu | Bloomberg | Getty Images
SINGAPORE – HSBC, Europe’s largest bank by assets, is expected to see another slump in earnings as it attempts to recover from the economic shock of the coronavirus pandemic.
Headquartered in London, the bank is expected to release its financial report for the quarter July-September at 12:00 noon HK / SIN on Tuesday.
HSBC’s reported pre-tax profit is expected to be around $ 2.07 billion in the third quarter, the bank estimates. That’s roughly 57.2% less than the bank’s $ 4.84 billion in profits a year ago.
The bank’s provision for anticipated credit losses is estimated to increase by $ 2.02 billion in the quarter.
While signs of recovery may not be “very robust” right now, the bank’s outlook could improve from here if Covid-19 cases around the world don’t worsen significantly, said Jackson Wong, director of asset management at Amber Hill Capital.
“I think the worst could probably be over,” he told CNBC’s “Squawk Box Asia” on Tuesday.
“We didn’t see a very bright future at this point so it could get better (at the beginning) but it’s not very robust at this point,” he added.
HSBC is traditionally preferred by investors for its steady dividend payout. But the bank stopped paying dividends when UK regulators asked commercial lenders to raise capital.
The bank’s Hong Kong-listed stocks are down 47% since Friday this year, while London-listed stocks are down 45.7% over the same period, data from Refinitiv showed.
HSBC’s upcoming financial results follow those of other European banks, many of which have exceeded analysts’ expectations.
Last week, UK lender Barclays reported third-quarter net income more than double what analysts had forecast as the bank allocated less money to potentially bad loans.