HONG KONG (AFP) – HSBC on Tuesday vowed to accelerate its Asia pivot despite spiralling tensions between China and the West after it reported a 30 percent plunge in profits for 2020 caused by the coronavirus pandemic.
Reported profit after tax came in at $6.1 billion, which the bank blamed primarily on higher-than-expected credit losses and other bad debts.
Fourth-quarter profits were halved to $2.2 billion but beat estimates, helped by the lender keeping costs down as part of a major restructuring it has already embarked on.
The results came as HSBC published a new strategy laying out plans to speed up its attempt to seize more of the Asian market — the region of the world where the Europe’s largest lender makes most of its profits.
The strategy will see the London-headquartered bank plough some $6 billion into shoring up operations across Asia, with a particular focus on targeting wealth management in the increasingly affluent region.
The bank made specific mention of markets in Southeast Asia such as Singapore, as well as China and Hong Kong.
”We plan to focus on and invest in the areas in which we are strongest,” CEO Noel Quinn said in a statement.
The global economic slowdown caused by the virus has hit financial giants hard.
But HSBC has a further headache — soaring geopolitical tensions via its status as a major business conduit between China and the West.
HSBC makes 90 percent of its profit in Asia, with China and Hong Kong being the major drivers of growth.
As a result, it has found itself more vulnerable than most to the crossfire caused by the increasingly frayed relationship between China and western powers — especially after Beijing imposed a draconian security law on Hong Kong last year.