HSBC (NYSE:HSBC), Europe's largest bank by to assets, said in its first-quarter earnings report that it was adding $3 billion to its provisions for losses in light of the COVID-19 pandemic, which is wreaking havoc on the world's economies and on companies' and individuals' finances.
"The resultant increase in expected credit losses in the first quarter contributed to a material fall in reported profit," said CEO Neil Quinn. Net profit dropped 57% to $1.79 billion.
In recent weeks, many banks and lending companies have made similar moves to set aside additional funds to cover their anticipated losses, as the pandemic and the economic downturn it has caused raise the likelihood that borrowers will be unable to repay their loans.
Source Fool.com