AFP, Hong Kong

HSBC said Tuesday that pre-profit fell to US$9.4 billion in the first quarter, missing expectations, as it was hit by credit losses from United Kingdom fraud-linked issues and the Middle East crisis.

The 1.1 percent on-year drop meant the lender came up short of the US$9.6 billion it had forecast for the first three months of the year.

“The decrease reflected higher expected credit losses and other credit impairment charges in 1Q 26, an adverse impact from notable items and a rise in operating expenses,” HSBC said in a Tuesday statement.

The bank’s expected credit losses surged to US$1.3 billion, primarily reflected in a $400 million “fraud-related, secondary, securitisation exposure with a financial sponsor in the UK,” it said.

It added that a US$300 million increase in allowances reflected “heightened uncertainty and a deterioration in the forward economic outlook” caused by the Iran war.

The company’s Hong Kong-listed shares fell more than four percent in afternoon trade. The bank forecast “a mid-to-high single-digit percentage adverse impact on profit before tax” from a range of issues.