HSBC Holdings is preparing for a difficult year. The British lender said bad credit losses reached 3 billion USD in the first quarter – almost double its expectations. For the whole year, they are projected to reach 11 billion USD.

The report for the period from January to March 2020 shows that adjusted profit before taxes of 3.02 billion USD does not meet the bank’s forecasts. At the same time, the lender has been devoting its largest amount to bad credit provisioning for nearly nine years.

“The economic impact of the pandemic on our customers has been a major driver of change in our financial performance since the beginning of the year”, said the CEO of HSBC, Noel Quinn. “The increase in credit losses in the first quarter contributes to a significant decrease in reported pre-tax profit compared to the same period last year”, added he.

According to figures this year, bad debts could reach between 7 billion USD and 11 billion, USD leading to “noticeably lower profits” in 2020, offset by somewhat lower operating costs. Business restructuring costs will also be lower this year than expected.

Credit losses include a significant amount in Singapore, where the bank lent a $ 600 million loan to an indebted oil trader whose name is not mentioned.

The bank also recorded adjusted revenues of 13.3 billion USD, down from 14.1 billion USD a year earlier. Net equity to risk-weighted assets (CET1 ratio) also fell to a minimum of 14.6% from 14.7% in the previous quarter.

Like other competitors, HSBC manages to capitalize on increased activity in turbulent markets. The Bank reports a growth of 25% in its revenue from the International Market Trading Unit.

A strong Asian Asian lender has announced earlier that it is canceling its dividend this year, which has angered investors in Hong Kong and plunged its shares to an 11-year low this month. This prompted Quinn to delay some key elements of the February restructuring program, which included cutting 35,000 jobs, merging businesses and accelerating turn to Asia to boost profits.