HSBC reported a profit of $9.4 billion for the first quarter of 2026, down from $9.48 billion a year earlier. The bank faced a $1.3 billion hit to profits due to rising credit provisions and fraud-related charges.
On May 5, shares fell more than 5%, making HSBC the biggest faller on the FTSE 100. The decline in profit stemmed from a $400 million fraud-related charge linked to its investment banking division.
As of midday, HSBC’s total exposure to the private credit sector is worth $6 billion. This situation raises alarms about risks associated with this sector.
The UK financial regulator has launched an investigation into the fraud scandal involving Mortgage Financial Solutions. Officials have not confirmed the timeline for this investigation.
HSBC’s revenue increased by 6% to $18.6 billion in Q1 2026. However, analysts note that the profit decline was also linked to a $300 million increase in potential losses due to the ongoing conflict in the Middle East.
Pam Kaur, an HSBC spokesperson, stated, “We’ve always been very mindful of private credit risks.” Dan Coatsworth added, “The sizeable fraud-related charge is a reminder that risks don’t only exist in more far-flung parts of the world.”
Richard Hunter remarked, “These credit impairments largely blotted the copybook for this quarter.” Chris Beauchamp concluded, “Unfortunately that means the Hormuz crisis looms large in the results, casting a shadow over an otherwise solid set of numbers.”
