HSBC has reported first-quarter pre-tax profits of £6.96 billion, missing analyst forecasts, after booking a £960 million charge for bad debts. The provision included a £295 million loss linked to a UK fraud case involving loans to a private equity firm with exposure to a private-credit company.
The bank also set aside £222 million due to heightened uncertainty from the Iran war, which has worsened the economic outlook. Overall expected credit losses rose 50% year-on-year, also impacted by higher trade tariffs.
Barclays last week announced an £823 million provision for bad debts, largely driven by a £228 million impairment related to the collapse of UK property lender Market Financial Solutions amid fraud allegations. Regulators are increasingly concerned about risks in the private credit market.
HSBC's revenues increased 6% to £13.7 billion, driven by strong wealth management and Hong Kong business. CEO Georges Elhedery said the bank is making progress toward its 2026 targets and remains on track to achieve £1.1 billion in annual cost savings by June.
Analysts noted that the Iran crisis casts a shadow over otherwise solid results. Chris Beauchamp of IG said the economic warnings will grow if the situation remains unresolved.
