Covid-19 wreaked havoc on the profits of Vancouver-based HSBC Bank Canada during the second quarter.
A combination of market volatility, low interest rates and oil prices, and reduced customer activity resulted in a 95% plunge in profit compared to a year earlier, the bank reported Monday.
HSBC’s Q2 profit was $8 million — down from $168 million in Q2 2019.
“This pandemic environment is not a normal time and our results for this period are not what we are accustomed to delivering,” Sandra Stuart, president and CEO of HSBC Bank Canada, said in a statement.
The bank recorded $190 million in loan loss provisions, up from $40 million in Q2 2019. The increase was attributed to a deteriorating economic outlook and impairment charges from non-performing loans in the energy sector.
The bank’s overall operating income was $502 million, down 7.9% from a year ago, and net interest income was $249 million, down 22% from a year ago.
HSBC’s wealth and personal banking division had operating income of $180 million, down 11% from a year earlier.
Higher net fee income and growth in lending, deposits and wealth balances were “more than offset by lower net interest income due to the central bank rate decreases and higher costs associated with maintaining increased liquidity,” the bank stated in a release.
Operating expenses for the quarter were $304 million, down almost 10% from a year ago, due to staffing cuts and lower discretionary costs.