HSBC says its first quarter profits have almost halved due to the impact of the coronavirus pandemic.
Pre-tax profit for the first three months of the year came in at $3.2bn (£2.6bn), down from $6.2bn a year ago.
The bank increased its expectations of bad loans, which are unlikely to be paid back, to $3bn due to the fallout from Covid-19 and as oil prices slump.
However, it confirmed it would put plans to axe 35,000 jobs on hold to support staff during the outbreak.
The London-headquartered bank warned that the negative effect of the pandemic on the global economy would mean an increase in the number of bad loans.
It also said that there would be sustained pressure on the bank’s earnings as customer activity falls and lower central bank interest rates hit profitability.
The bank also highlighted “a significant charge related to a corporate exposure in Singapore”.
In February HSBC said it would scale back its headcount from 235,000 to about 200,000 over the next three years.
The move is part of the a restructuring programme as it targets $4.5bn of cost cuts by 2022.
The bank has now confirmed that it was pushing ahead with those restructuring plans but had halted job cuts to avoid disruption and leaving staff unable to find work elsewhere due to the coronavirus outbreak.
‘Best bit of news’
Simon French, chief economist at Panmure Gordon, told the BBC’s Today programme that this part of the earnings report is likely to be greeted quite differently by HSBC’s workers and investors.
“This is probably the best bit of news in the whole results for employees,” he said.
“While it’s good news for employees it isn’t necessarily good news for shareholders and a return to higher profitability,” he added.
Separately, in a note to employees earlier this month HSBC’s chief executive Noel Quinn said he would donate a quarter of his base salary for the next six months to charity, which works out at £160,000. He will not take his annual cash bonus, which would have been up to £1.2m.
Chief financial officer Ewen Stevenson said he would do the same, donating £93,000 and forgoing £706,000, while chairman Mark Tucker will donate his entire 2020 fee to charity, about £1.5m.
It came as senior executives and board members at other major UK banks, including RBS and Lloyds, agreed to give up their bonuses for this year.
The announcements were in response to calls from the Bank of England to restrict bonuses.