VANCOUVER — HSBC Bank Canada reported a drop in its first-quarter profit compared with a year ago as it took a charge related to bad loans it expects due to the downturn in the economy.
The bank says it earned a profit attributable to common shareholders of $54 million or 11 cents per share for the quarter ended March 31. That's compared with a profit of $158 million or 32 cents per share in the first three months of 2019.
An preliminary estimate by Statistics Canada suggests the Canadian economy pulled back nine per cent in March as steps to slow the spread of COVID-19 forced the closure of businesses across the country.
The price of oil also tumbled as demand fell and Russia and Saudi Arabia were embroiled in a price war.
HSBC Bank Canada says its latest quarter included a charge of $140 million due to the downturn in its outlook for the economy and its impact on its loan portfolio as well as non-performing loans in the energy sector driven by the drop in oil prices.
The charge compared a gain of $12 million in the same period a year earlier.
This report by The Canadian Press was first published April 28, 2020.
The Canadian Press