Home > Business > HSBC reports 35% fall in profits and warns it could start charging for current accounts

HSBC reports 35% fall in profits and warns it could start charging for current accounts

HSBC has warned it could start charging for “basic banking services” after reporting a 35% fall in pre-tax profits for the three months to the end of September.

With interest rates so low, Europe’s biggest bank by assets is finding it difficult to charge more for loans than it pays out to depositors.

The bank said it is considering charging for products such as current accounts, which British customers are accustomed to having for free.

Chief Financial Officer Ewen Stevenson told Reuters: “We will have to look at charging for basic banking services in some markets, because a large number of our customers in this environment will be losing us money.”

HSBC reported pre-tax profits of $ 3.1bn (£2.4bn) for the third quarter, down from $ 4.8bn (£3.7bn) at the same time last year.

The drop was less than expected, with the bank saying it expects losses from bad loans will not be as bad as forecast and that its main markets will improve.

Asia-focused HSBC said: “This latest guidance, which continues to be subject to a high degree of uncertainty due to COVID-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low.”

More from Business

The bank has previously said it will cut costs and downsize, shedding 35,000 jobs worldwide, selling its French business and minimising its presence in the US.

It also plans to reduce costs to $ 31bn (£24bn) by 2022, well below last year’s operating expenses of $ 42.3bn (£32bn).

CARDIFF, UNITED KINGDOM - OCTOBER 28: A man uses a Santander cashpoint on October 28, 2018 in Cardiff, United Kingdom. (Photo by Matthew Horwood/Getty Images)
Image: Santander is forecasting an improvement in profits for the year

Meanwhile, Spanish bank Santander forecast an improvement in core profits for the year, with executive chairman Ana Botin saying: “The recovery of our business is progressing well, and the third quarter was significantly stronger than the second.

“Revenues increased 18% in constant euros as activity returned close to pre-pandemic levels.”

The bank has forecast an underlying profit of around €5bn (£4.5bn) this year, having reported that net profit more than trebled in the third quarter to €1.75bn (£1.6bn) compared with the same period a year ago.

However, in underlying terms, the third quarter net profit fell by 18% due to coronavirus-related provisions, following a second quarter net loss of €11.1bn (£10bn), also due to COVID-related write-downs.

Let’s block ads! (Why?)

Business News – Markets reports and financial news from Sky

Leave a Reply

Your email address will not be published. Required fields are marked *