Inside Business
How HSBC’s gamble on China failed to pay off
The group publicly backed Beijing’s controversial Hong Kong security law, angering critics in the west. Welcome to life on a geopolitical fault line, writes James Moore
HSBC rounded off the UK banking season with a gut punch. In common with its London listed peers, its provisions against bad loans surged, to $3.8bn (£2.9bn). That brought the total to $6.9bn on the year.
The problem is that the second quarter contribution to that unpleasant looking total, a seven-fold increase on the previous year, was around $1bn more than the analysts had expected and all but wiped out the bank’s net profits in the process. There will be more coming too.
The market was braced for something unpleasant but the scale of HSBC’s problems caught it on the hop and the shares duly sank like Donald Trump’s re-election chances.
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