A woman walks past an HSBC bank in Toronto on April 9, 2014.Fred Lum/The Globe and Mail
HSBC Bank Canada reported a drop in its first-quarter profit compared with a year ago as it took a charge related to bad loans it expects owing to the downturn in the economy.
The bank says it earned a profit attributable to common shareholders of $54-million, or 11 cents a share, for the quarter ended March 31. That’s compared with a profit of $158-million, or 32 cents a share, in the first three months of 2019.
A preliminary estimate by Statistics Canada suggests the Canadian economy pulled back 9 per cent in March as steps to slow the spread of COVID-19 forced the closing of businesses across the country.
The price of oil also tumbled as demand fell and Russia and Saudi Arabia were embroiled in a price war.
HSBC Bank Canada says its latest quarter included a charge of $140-million owing to the downturn in its outlook for the economy and its impact on its loan portfolio as well as non-performing loans in the energy sector driven by the drop in oil prices.
The charge compared a gain of $12-million in the same period a year earlier.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.