HSBC has set aside $876 million to prepare for potential bad loans amid escalating trade tensions caused by U.S. tariffs. While the bank's pre-tax profits fell to $9.5 billion compared to the previous year, the results surpassed analysts' expectations. The provision included $150 million directly linked to a deteriorating economic outlook influenced by protectionist policies, with possible additional losses of $500 million anticipated. HSBC's unique position as a bridge between East and West makes it sensitive to trade disruptions, highlighting the increased economic uncertainty under new CEO Georges Elhedery as significant challenges loom.
The macroeconomic environment is facing heightened uncertainty, in particular from protectionist trade policies, creating volatility in both economic forecasts and financial markets and adversely impacting consumer and business sentiment.
Despite the drop in profits to $9.5 billion, HSBC's performance still exceeded City analysts' expectations, who had predicted $7.8 billion.
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