London-based HSBC is pausing global restructuring plans announced in February and said pre-tax profit fell 48%, to $3.2 billion, during the first quarter due to the impact of COVID-19 which is forcing the bank to make additional provisions for credit losses. 

Revenue fell 5% due to adverse market impacts on life insurance manufacturing and adverse valuation adjustments in its global banking business, which offset strong performance in Asia, as well as its global markets, retail banking and global private banking businesses, according to a press release.

"The economic impact of the COVID-19 pandemic impact on our customers has been the main driver of the change in our financial performance since the turn of the year," Noel Quinn, Group CEO at HSBC, said in the first-quarter announcement. "The resultant increase in expected credit losses in the first quarter contributed to a material fall in reported profit before tax compared with the same period last year."

He said the bank has delayed the vast majority of job cuts announced in February as part of its companywide restructuring plan. 

The bank said the crisis has led to a substantially worse outlook for world economies in 2020 and will likely lead to higher credit losses and put pressure on revenue due to reduced customer activity and lower global interest rates. 

The company plans to reduce expenses to make up for the lower expected revenue. 

Cover image: HSBC