The UK’s banking giant HSBC said Monday that its net profit plummeted 96% in Q2 of this year due to the coronavirus crisis.
The bank’s net profit was $192 million in the April-June quarter, down from $4.37 billion in the same period last year. Net profit in Q1 was $1.79 billion.
Near-zero interest rates meant to help businesses keep running with cheap credit are squeezing margins for lenders, HSBC said. The bank forecasts expected credit losses of $8 billion-$13 billion in 2020.
In February, the bank announced around 35,000 job cuts as part of a major restructuring project. CEO Noel Quinn said that HSBC halted its restructuring efforts in the last quarter to focus on supporting its customers.
“Our first half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility”, Quinn stressed.
