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Home >Industry >Banking >HSBC India clocks 1.8% rise in pre-tax profit to $1.02 bn
Noel Quinn, group CEO, HSBC Holdings Plc
Noel Quinn, group CEO, HSBC Holdings Plc

HSBC India clocks 1.8% rise in pre-tax profit to $1.02 bn

At a global level, HSBC’s profit before tax fell 34% to $8.8 bn, which it attributed to higher expected credit losses

Global banking corporation HSBC’s India operations reported a profit before tax of $1.02 billion in 2020, up 1.8% from the previous year. India was the bank’s third-largest contributor to the profit of HSBC Holdings Plc, after Hong Kong at $8.2 billion and Mainland China at $2.61 billion in 2019-20.

In 2019, HSBC’s India operations made a pre-tax profit of $1 billion. However, at a global level, HSBC’s profit before tax was down 34% to $8.8 billion, which the bank attributed to higher expected credit losses and other credit impairment charges, and lower revenue, partly offset by a fall in operating expenses. Profit after tax was down 30% to $6.1 billion.

The bank said the reported results in 2020 included a $1.3 billion impairment of software intangibles, while reported results in 2019 included a $7.3 billion impairment of goodwill.

As on 31 December 2020, HSBC had 226,000 employees compared with 235,000 at the end of 2019. In India, it had 39,000 employees in the same period.

“In 2020, our people delivered an exceptional level of support for our customers in tough circumstances, while our balance sheet and liquidity gave reassurance to those who rely on us. We achieved this while delivering a solid financial performance in the context of the pandemic, particularly in Asia, and laying firm foundations for our future growth," said Noel Quinn, group chief executive, HSBC Holdings Plc.

The bank recognizes a number of fundamental changes, including the prospect of prolonged low interest rates, the significant increase in digital engagement from customers, and the enhanced focus on the environment, and has aligned its strategy accordingly, it said.

HSBC intends to increase its focus on areas where it is strongest, increase and accelerate investments, and continue to progress with the transformation of its underperforming businesses, it said.

“The pandemic inevitably affected our performance. The shutdown of much of the global economy caused a large rise in expected credit losses, and cuts in central bank interest rates reduced revenue in rate-sensitive business lines," Quinn said.

The bank’s global net interest margin (NIM) was 1.32% in 2020, down 26 basis points (bps) from 2019, because of the impact of lower global interest rates.

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