The London-based lender on Tuesday said that pre-tax profit dropped to $3.2 billion in the first quarter, a 48% plunge compared to a year earlier.
The bank added that it increased its allowance for expected credit losses this year to as much as $11 billion — nearly $2 billion more than it had set aside at the end of last year. It said expected credit losses rose to $3 billion last quarter in part due to coronavirus.
“The outlook for world economies in 2020 has substantially worsened in the past two months,” the company said in a statement.
Performance there was actually “resilient” compared to expectations, the bank noted. Profit in Asia fell about 25% in the first quarter, compared to steep losses in North America and Europe.
The initiative was announced in February, and would have made up “one of the deepest restructuring and simplification programs in the bank’s history,” according to CEO Noel Quinn, who was named permanent chief executive last month after serving on an interim basis.
For now, Quinn said the bank is suspending the “vast majority” of that restructuring plan to reduce uncertainty for employees.
HSBC is also delaying part of its plan to shed $100 billion in assets, which is expected to help reduce restructuring costs for this year.
“The economic impact of the Covid-19 pandemic on our customers has been the main driver of the change in our financial performance since the turn of the year,” said Quinn.
“We continue to press forward with the other areas of our transformation.”
— Julia Horowitz contributed to this report.