HSBC pretax profit rises 79% on recovery from pandemic damage

HSBC Holdings PLC on Tuesday reported a significantly better-than-expected 79% rise in first quarter profit, as an improved economic outlook allowed the bank to release cash set aside against bad loans because of the coronavirus pandemic.

Europe’s biggest bank by assets posted profit before tax of $5.78 billion for the three months ended on March 30, up from $3.21 billion a year ago and well above an average analyst forecast of $3.35 billion compiled by the bank.

The bank released $400 million of provisions for bad debts, which it said “reflected an improvement in the economic outlook, notably in the UK”. HSBC had set aside an additional $3 billion a year earlier as the impact of the pandemic began to hit.

HSBC, which makes the bulk of its profits in Asia, said its credit losses for 2021 were likely to be below the medium-term range of 30-40 basis points it forecast in February.

via Reuters