HSBC profits plunge by 30% as economic challenges persist
- HSBC's profit after tax fell by 30% year-on-year to 12.4 billion dollars.
- The bank attributed significant losses to operations previously sold in Argentina and Canada.
- HSBC expects lending to remain muted for the rest of 2025 as they navigate economic uncertainties.
In the first half of 2025, HSBC, the banking giant headquartered in the United Kingdom, faced significant financial challenges, resulting in a sharp decline in profits. Profit after tax dropped by 30% year-on-year, amounting to 12.4 billion dollars. This downturn was largely attributed to various factors, such as the sale of operations in Argentina and Canada, which alone accounted for 3.6 billion dollars in losses. Additionally, the bank faced dilution and impairment losses linked to its stake in Bank of Communications, contributing 2.1 billion dollars to the profit decline. Despite ongoing financial pressure, HSBC reported a focus on cost management and investment in technology to adapt to a changing economic landscape characterized by geopolitical tensions and increasing trade tariffs. The overall revenue fell by 3.2 billion dollars to 34.1 billion dollars, further reflecting the impact of the aforementioned disposals. The bank's leadership expressed confidence in their strategy, indicating that their core businesses are sustaining momentum. In a company statement, HSBC underscored the necessity for allowances in their financial calculations to address uncertainty and anticipated further economic decline. The ongoing investment plans are aimed at bolstering the bank's industry position and improving the customer experience during these complex times, highlighting their commitment to managing the challenges braced by global market volatility. Looking ahead, HSBC's leadership anticipates continued muted demand for lending throughout 2025. The broader implications of the current economic situation point to the necessity for firms like HSBC to rethink strategies amid relentless external pressures, with CEO Georges Elhedery affirming their strategic commitment to streamline operations and maintain operational agility. Through these efforts, HSBC remains hopeful about its capability to navigate through the prevailing economic uncertainty while working towards its defined targets and goals.