LONDON (AP) — Europe’s biggest bank, HSBC, said yesterday that its net profit plummeted 96 per cent in the second quarter of this year as lower interest rates combined with the downturn due to the coronavirus pandemic took hold.

The bank’s net profit attributable to ordinary shareholders was US$192 million in the April-June quarter, down from US$4.37 billion reported in the same period a year earlier.

London-based HSBC has most of its business in Asia, where the pandemic began, first emerging in central China.

Near-zero interest rates meant to help businesses keep running with cheap credit are squeezing margins for lenders. The bank forecast expected credit losses of US$8 billion-$13 billion in 2020, though it said that was “subject to a high degree of uncertainty”.

HSBC said its lending in the last quarter fell three per cent to US$29 billion, while deposits rose six per cent to US$85 billion as customers saved more and spent less.

Revenue slipped 12 per cent to US$5.6 billion thanks to slimmer interest rate margins and weaker wealth management activity.

One area of growth was mobile payments, which more than doubled from a year earlier to US$71.4 billion.

Earlier this year, the bank said it will shed some 35,000 jobs as part of an overhaul to focus on faster-growing markets in Asia and as it tries to cope with a slew of global uncertainties, from Brexit to the trade wars to the pandemic.

The bank’s chief executive, Noel Quinn, said in a presentation posted online that HSBC paused its restructuring efforts in the last quarter to focus on supporting its customers.

“Our first-half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility,” Noel Quinn said in a statement.

Still, he said, HSBC’s Asia business showed “resilience”.

“We are also looking at what additional actions we need to take in light of the new economic environment to make HSBC a stronger and more sustainable business,” Quinn said.

HSBC’s troubles reflect those of the wider banking industry. Apart from low interest rates, in Europe many banks are still dealing with problems left over from the financial crisis.