HSBC Holdings Plunges 3.11% Amid Credit Loss Hike, Economic Uncertainty

On April 30, 2025, HSBC Holdings experienced a 3.11% drop in pre-market trading, reflecting investor concerns over the bank's recent financial performance and macroeconomic uncertainties.

HSBC Holdings has revised its expected credit losses for the first quarter of 2025, increasing them by $2.02 billion to $8.76 billion. This adjustment comes as the bank faces challenges from global economic slowdowns and increased commercial instability due to trade tensions. The bank's net interest income, a key component of its earnings, also declined from $86.5 billion in the previous year to $83.0 billion in the first quarter of 2025. This decline, coupled with a 25% drop in pre-tax profits to $9.5 billion, highlights the bank's struggle to maintain profitability in a challenging economic environment.

In response to these challenges, HSBC Holdings has announced a $30 billion stock buyback program. The bank's CEO, Georges Elhedery, emphasized the bank's financial strength and its commitment to supporting customers through the current economic uncertainties. The bank has also been focusing on its wealth management business, which has shown growth in the first quarter of 2025, driven by a $2.5 billion increase in revenue. This strategic shift is part of the bank's broader effort to diversify its revenue streams and reduce its reliance on interest income.

HSBC Holdings has also been expanding its wealth management services in Asia, particularly in China. The bank has opened new wealth management centers in several Chinese cities, including Hangzhou, and plans to open more in the coming year. This expansion is part of the bank's strategy to capitalize on the growing demand for wealth management services in the region. Despite these efforts, the bank's stock price has been volatile, reflecting the broader economic uncertainties and the impact of trade tensions on global markets.