HSBC reported a sharp decline in profit as mounting losses in China dragged down the bank’s overall performance. The global lender, which has significant exposure to Asian markets, said its earnings were hit by deteriorating conditions in China’s property sector and weaker-than-expected economic recovery.
The bank’s pre-tax profit fell well below analyst expectations, highlighting the challenges facing international financial institutions heavily invested in China. Provisions for bad loans linked to Chinese real estate and corporate debt significantly impacted the bottom line.
CEO Noel Quinn acknowledged the headwinds, stating, “While our business in many regions remains strong, the ongoing volatility in China has created earnings pressure that we continue to monitor closely.”
Investors reacted cautiously, with HSBC shares sliding in early trading. The bank emphasized its commitment to long-term growth in Asia, but warned that short-term uncertainty in China could continue to weigh on results.
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